What Regulatory Reform Can Mean for Growth

“The power to tax is the power to destroy,” according to Chief Justice John Marshall is an often-referenced statement. A
lesser-known and unattributed thought is “the power to regulate is the power to destroy slowly.” Regulation growth has been significant in the last couple decades in the US as shown by the George Washington Regulatory Studies Center.

Even more pronounced is that the cost to administering these new regulations has risen even faster. The costs in the chart
on the next page include spelled out expenses in the budget and agency staff costs.

In addition, the costs of complying with regulation for businesses are much higher. Forbes estimated hidden costs of
regulation are as much as nine times the reported costs and smaller companies’ marginal cost of dealing with regulation is
four times that of larger companies. The National Association of Manufacturers (NAM) quantified some regulation costs
even further, finding that 2012’s regulations cost over $2 trillion with direct compliance costs of $138 billion. It also noted
that the average US Company spent nearly $10,000 per employee and the average manufacturing company about $20,000
per employee to deal with regulations. Continue reading here…