I first started writing about the Competitive Enterprise Institute’s annual report about red tape back in 2010.
The newest edition was just released, so let’s take a depressing look at America’s regulatory burden.
We’ll start with the chart showing the enormous regulatory costs per household. More than food, clothing, transportation, or health care!
As you might expect, the burden or red tape has dramatically increased over time, with the 1970s being especially bad (I assume mostly the fault of Richard Nixon since Jimmy Carter actually oversaw some very successful deregulation).
Let’s look at some excerpts from the author, Clyde Wayne Crews.
While new spending programs show up in budget figures, new regulations requiring the private sector to do similar things at its own expense do not. Off-budget regulations have grown common… Off-budget or not, these regulatory costs drag down the economy, much as over-spending can. …regulatory compliance costs and mandates borne by businesses percolate through the economy and materialize as higher prices, lost jobs, and lower output. …When the administrative state began its march over a century ago, few imagined the tangle of hundreds of thousands of rules and guidance documents it would produce… This 2025 edition sets a new mark of $2.155 trillion in regulatory costs. …US households pay on average $16,016 annually in a hidden regulatory tax, which consumes 16 percent of income and 21 percent of household expenses. …The 10.5 billion hours Washington says it took to complete federal paperwork in 2023, according to the Information Collection Budget, translate to the equivalent of 14,983 human lifetimes.
By the way, 10.5 billion hours is also akin to more than 5 million people working full time for a year.
P.S. Trump’s overall regulatory record during his first term was imperfect, but he did slow down the growth of red tape. This is one of the areas where I’m optimistic about how he will do during his second term (unlike trade, ahem). Heck, I’ve already written about his Liberation Day for shower heads. Since that step increased our freedom, it was the complete opposite from his Liberation Day for trade.
Dan Mitchell is co-founder of the Center for Freedom and Prosperity and Chairman of the Board. He is an expert in international tax competition and supply-side tax policy.
