Every American knows about the income tax. But how many are aware of the regulatory tax?
That’s the cost of all regulations (good, bad and indifferent) imposed on Americans by the 60 or so government agencies that contribute to the 175,000-page (and growing) Code of Federal Regulations.
The fact that we don’t hear nearly as much about the regulatory tax doesn’t mean it isn’t substantial. As Heritage Foundation scholar James Gattuso notes, “While the revenues and expenditures of the government are accounted for each year, the costs of regulation are largely hidden from view, paid for indirectly via higher prices, fewer choices, and less innovation.”
Regulators were busily up to mischief throughout 2013. Gattuso and Heritage scholar Diane Katz recently compiled a list of the worst regulations of last year. They include:
Your microwave: The Energy Department finalized a rule limiting the energy that microwave ovens may consume when in “stand-by” or “off” mode. All in a day’s work for regulators, but in the cost-benefit analysis they used to justify the rule, they overestimated the value of reducing carbon emissions by 50 percent. “This bloated number allowed not only greater regulation of microwaves, but also tighter rules on any carbon emissions anywhere,” Gattuso and Katz write.
Your food: Consumption of trans fats is down 78 percent in recent years. But don’t thank regulators. It happened how it’s supposed to happen in a free market: consumer demand led food manufacturers to reformulate their products. But that’s not enough for the FDA: they want to ban trans fats entirely, arguing that any amount is dangerous. The FDA estimates the initial cost of the ban to be about $8 billion.
Your Christmas tree: In its version of the $1 trillion farm bill, the House approved a provision that requires the Department of Agriculture to impose an “assessment” of 15 cents on every fresh Christmas tree sold. Why? To fund a promotional campaign for the industry. This is absurd on its face: the Christmas tree industry hardly needs help selling such a popular product. And if this sounds familiar, that’s because it is: it’s the same program the department wanted to impose in 2011 until public outcry led to its withdrawal.
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