James Leroy Wilson's blog

Wednesday, May 13, 2009

The $13,000 Tax


Quote of the Day: Do not let these 545 people (Congress, President, and Supreme Court) shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take it. . . . Those 545 people and they alone are responsible. - Charley Reese

Subject: Who's responsible for the $13,000 tax?

Every year, politicians and activists unveil plans to make taxes more simple and fair, but they never say anything about the worst tax of all.

It's a tax that Clyde Wayne Crews of the Competitive Enterprise Institute estimates will cost $1.3 trillion this year, which is about $13,000 for the average American family.

  • Nobody ever gets a refund.

  • It doesn't take into account one's ability to pay.

  • It doesn't increase revenue or decrease the deficit; actually, it increases deficits by depressing the economy.

You might not have heard about it. The tax is hidden. Not everyone pays it the same way:

  • Everyone pays at least some of it through higher prices on goods and services

  • Some, like small business owners, pay it through reduced profits and even bankruptcy

  • Others pay it through depressed wages or unemployment

  • We may even pay it through higher state and local taxes, or reduced state and local services

It's the Regulation Tax, the cost of complying with federal regulations and unfunded mandates. Each regulation will cost an affected business some money, and that will translate into reduced profits, higher prices, or both. And so everybody pays: owner, employee, customer.

And contrary to popular belief, regulations are almost always unnecessary. A free market would have laws against violence, fraud, and theft. What it wouldn't have is needless government intervention. In a free market, producers would be forced to serve the public interest by delivering safe, quality goods at ever-lower prices.

  • If they cheat workers and customers through fraud, they would be prosecuted.

  • If they do harm through sloppiness and negligence, they could be sued.

  • If they deliver poor quality, they will deservingly lose business.

In a free market, firms have built-in incentives to provide safe working conditions and safe, quality goods and services. The federal government makes this difficult by imposing one-size-fits-all regulations - and businesses are still usually liable for accidents and mistakes that escape regulatory supervision. So at best, regulations dictate what businesses would have done anyway; at worst they impose additional, unnecessary, and costly restrictions and burdens that actually make it harder to deliver safe, quality goods and services.

So who's to blame for the Regulation Tax? Consider . . .

  • By the end 2007, 188 bills passed both houses of Congress and were signed into law

  • In comparison, unelected bureaucrats in federal agencies issued 3,595 "final rules" - regulations with the force of law

  • 157 of these regulations were "economically significant" - costing $100 million or more each

  • 757 regulations affecting small business were being considered

    (Source: Clyde Wayne Crews, Jr., Competitive Enterprise Institute)

Even so, it is Congress, not the Bureaucracy, that is to blame for the Regulation Tax.

  • Congress passes the spending bills which fund the regulatory agencies, and Congress is therefore responsible for the results

  • It is wrong for the American people to suffer taxation, or regulation, without representation

  • Congress unconstitutionally delegates law-making power to the bureaucrats, and Congress must take that power back

Downsize DC's Write the Laws Act would force every regulation to be passed in Congress as a bill. When the WTLA passes,

  • The people will have been represented when regulations are passed and implemented

  • Time constraints will mean fewer regulations will be proposed, and only those universally agreed to as necessary will pass

  • Businesses will be freed to become more efficient in serving the public

  • Our Regulation Tax will go down sharply

Use our quick and easy Educate the Powerful System to tell your Congressional employees to introduce and pass DownsizeDC.org's "Write the Laws Act."

Use your personal comments to tell them that . . .

  • Regulations will cost American families $13,000 this year

  • Regulations are laws, and there should be no "legislation without representation"

  • Most regulations impose undue burdens on business and do not protect the public

Thank you for being a part of the growing Downsize DC Army.

James Wilson
Assistant to the President

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