The Average American Family Pays More Money in Regulations Than in Taxes

ORLANDO, FL — At a panel on the wide-ranging effects of government regulations, Florida Congressman Ron DeSantis argued that the average American family pays more money in hidden costs due to regulations than in direct taxes.

"I've seen some pretty credible analysis that suggests that the cost of indirect taxes through bureaucracy, through regulatory policy, through red tape, actually imposes a greater total burden on the average American family than what the government's imposing on you through direct taxes," DeSantis declared at the Defending the American Dream Summit run by Americans for Prosperity.

It works like this. "Regulatory costs are passed on to you as an American citizen," the congressman explained. When the government subsidizes ethanol or mandates a certain percentage in oil, for example, it helps some farmers and lobbyists, but harms everyone else. Groceries and energy become more expensive. "I represent a coastal district in Florida, and anyone who likes to go out on a boat, their engines get ruined from using the gas," DeSantis said.

"Those are costs, and they're not a direct tax on you but they are invisible taxes." The congressman estimated "the cumulative effect for the economy from having our regulatory leviathan" at $1.8 trillion, the same number that the Competitive Enterprise Institute estimated for all regulatory burdens in the year 2013. This is "roughly equivalent to how much money the government collects in personal and corporate income taxes," DeSantis said.

Even those numbers cannot account for the other effects of regulation. The congressman noted that increased red tape "really tips the scales in favor of the most entrenched interests and the biggest businesses." He mentioned the Dodd-Frank financial reform bill as an example. The bill was passed in order to hold big banks accountable, but in the wake of its implementation, the biggest banks have gotten bigger, while the smaller banks have been crushed because they can't afford the compliance costs.

Sofie Miller, a senior policy analyst at George Washington University's Regulatory Studies Center, explained how "federal regulations affect every single part of your day, whether you know it or not."

When you wake up in the morning, it might be using an alarm that you set on your phone, which is regulated by the FCC. After that, you might brush your teeth using toothpaste that's regulated by the FDA. You might be drinking water, regulated by the EPA. You might hop into a shower, where the shower head is regulated by both the EPA and the DOE. And that's before you've even had your morning coffee.

Miller listed many other less-known examples of regulation, like how much energy your microwave is allowed to use, and how big the holes in your swiss cheese are. "Did you know that the federal government has made it illegal for you to own a turtle that's smaller than four inches? Is that for your health and safety? Is that for the environment?" No, she explained, "it's because federal regulators think that if a turtle's smaller than four inches, you'll put it in your mouth and get salmonella."

You've heard of a nanny state? This is worse — it's a babying state. Such a regulation is literally treating Americans like babies.

Next Page: But don't some regulations make sense?