Dakota Beacon

As 2010 draws to a close, the sun also sets on legislated tax cuts enacted a few years ago. This expiration equates to a massive tax increase on all Americans.

            This is only the beginning. What lies in store, but is never mentioned, are the massive hidden taxes that also take effect in the new year.

            Every April Americans are reminded of the burden of taxation when they file their income tax returns with the IRS. They see a clear bottom line when they pay the government. Such is not the case with the hidden cost of government regulation.

            America has fallen victim to nameless, faceless rule-making bureaucrats who write regulations with the same status as law. They then sit as judge and jury imposing penalties on violators.

            On November 18, 2010, the Senate Committee on Small Business held hearings on the impact of over-regulation of businesses in America. Senator Olympia Snow (R-ME), a liberal Republican, made her opening statement.

“I don’t know how to say it any clearer: Excessive regulations are suffocating the entrepreneurial spirit of America’s almost 30 million small businesses. The Heritage Foundation, which is testifying here today, suggests that this Administration has embarked on nothing short of regulatory rampage, stampeding over small business, through the promulgation of 43 new major regulations promulgated in fiscal year 2010 -- imposing $26.5 billion in new regulatory compliance costs -- and that’s on top of the $1.75 trillion -- that’s trillion with a capital `T’! -- in annual regulatory compliance costs that the Office of Advocacy recently reported.”

            That’s a liberal speaking.

            The Heritage Foundation’s Senior Research Fellow in Regulatory Policy, James Gattuso, testified before the Senate committee. His testimony is summed up in his argument. “Hidden taxes imposed by an ever-larger number of government regulations” result in a heavier burden on the US economy. These costs “do not appear on any balance sheet, yet cost Americans about $1 trillion every year.”

            The direct cost of regulation falls disproportionately on small business. Those businesses with 20 employees or less pay, on average, $10,500 a year compared to an $8,000 average for all businesses. The impact on businesses goes beyond the direct costs. Businesses pay “regulatory taxes” in the form of higher prices for goods, reduced economic activity and hindered innovation.

            In 2010 alone, 43 major new rules were issued by federal agencies. By their own assessment, the regulators estimate that the cost to businesses of these rules will be $26.5 billion, the highest level since figures were first kept in 1981.

            The new rules break down as follows. Ten come from the Environmental Protection Agency (EPA). The EPA accounts for the bulk of the regulatory cost at $23 billion. Included in that figure is $10.8 billion for new automotive fuel economy standards. Also, the first time reporting of “greenhouse gas” emissions will add to regulatory costs.

            The 2010 record for the regulatory cost increases may not stand for long. In 2011 even more regulations will add to higher costs associated with doing business.

            More rules are on the way. The financial legislation recently adopted by congress (Dodd-Frank Wall Street Reform Act) will require 243 new sets of rules by 11 federal agencies.

            The new health care legislation (Obamacare) will add even more regulations. The same is true for the EPA as well as independent agencies such as the Federal Communications Commission and the Consumer Product Safety Commission.

            Higher regulatory costs contribute to unemployment. One pending EPA rule on boilers will threaten 71,000 jobs. Another pending rule related to the pulp and paper industry will threaten another 11,000 jobs. Still another pending EPA rule on ozone could cost a whopping 7.3 million jobs by 2020.

            Then there is the writing of new rules by the Transportation Security Administration (TSA) involving the screening of airline passengers. But, that is another story for another time.

            Expansion of regulations by federal agencies equates to a vast increase in the size of government. Every time you hear a radio or TV commercial paid for by a federal agency (HHS, USDA, FBI) you are witnessing the subtle indoctrination of the general public -- funded by the general public -- suggesting all solutions to life’s problems come from expansive government.

            Are we better off with more government regulation at the expense of our liberty and freedom and our subjugation to a new and growing permanent class of bureaucrats?

Dennis M. Patrick can be contacted at P. O. Box 337, Stanley, ND 58784 or (JavaScript must be enabled to view this email address).