Overregulation hurts the economy broadly:
- Excessive regulation is a tax on the economy, costing the U.S. an average of 0.8 percent of GDP growth per year since 1980.
- If we held fixed the number of industry-relevant regulations at levels observed in 1980, the U.S. economy would have been about 25 percent larger (roughly $4 trillion) in 2012.
It is making us less competitive:
- The United States ranks 27th out of 35 countries in product market regulation (which measures whether regulation encourages competition and ensures a level playing field among firms) behind France, Chile, and the Czech Republic (according to OECD calculations).
- The United States used to be the least regulated country, pursuing strong deregulation policies during from 1975 to 1998, using OECD regulatory indices that measure investment rates as a share of capital stock find (1975-1998).
It is costly, with much of the burden falling on small businesses and entrepreneurs:
- CEA estimates that business’ costs on compliances officers’ salaries have increased 171 percent since 2000 accounting for inflation -- an annual growth of 6.9 percent each year on average – or more than twice the rate of growth of the economy.
- In 2000, completing paperwork for Federal regulation cost an estimated $236 billion (up from $143 billion in 1980). Assuming the same proportion of compliance officers’ salaries out of total paperwork cost, the cost of paperwork increased to $881 billion in 2015.
- Regulation is especially burdensome for small businesses: the cost per employee of complying with regulations was higher for small firms ($11,724) than it was for firms with over 100 employees ($9,083)
- Burdensome regulations are easier for larger firms to shoulder, and drive small firms out of business or prevent them from entering in the first place.