Study: Federal Regulatory State Imposes $15k Tax on American Families

Critics have paid ample attention to the way inflation has quietly eroded Americans’ wealth under President Biden’s watch. But a new report highlights another huge “hidden tax” the federal government is imposing on us through its reckless overreach. 

The Competitive Enterprise Institute’s Clyde Wayne Crews Jr. just released his latest annual study on our seemingly-endless federal regulations—government rules and mandates—that increase the cost of doing business. The expert estimates that, taken together, the sweeping federal regulatory state now imposes a “hidden tax” of $14,684 per US family. 

“The cost of government extends well beyond what Washington collects in taxes and the far greater amount it spends,” Crews Jr. explains. “Federal environmental, safety and health, social, and economic regulations and interventions affect the economy by hundreds of billions— even trillions—of dollars annually.” 

“Unlike on-budget spending, regulatory costs are largely obscured from public view, constituting a hidden tax,” he continues. “Just as firms pass the costs of some taxes along to consumers, regulatory compliance costs and mandates borne by businesses will percolate throughout the economy, finding their way into consumer prices and workers’ wages.”

The report contains some truly stunning facts.

For one, a country whose economy was the size of just our regulatory costs would be the 8th-largest in the world! (Excluding the US). Similarly stunning is the fact that the “hidden tax” imposed on Americans by our regulatory state actually exceeds the typical income tax burden. In fact, according to Crews Jr., “a typical American household ‘spends’ more on embedded regulation than on health care, food, transportation, entertainment, apparel, services, or savings.”

This is a bipartisan problem, with the feds imposing huge amounts in hidden regulatory costs on Americans in years past regardless of which party is in power. 

However, the report notes that President Trump did make promising deregulatory reforms in many sectors during his time in office—which President Biden has since reversed. This means we can expect the hidden tax to grow even larger by next year, as Biden further adds to the regulatory stranglehold on our economy with new layers of regulations, including a flood of new rules focused on “diversity, equity, and inclusion.”

Never forget that the full cost of Big Government extends far beyond just your tax bill. 

Click here to read the full report.

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