Stopping the Red Tape

The best ideas are often the result of planning, foresight, boldness, and smart decision making. But how do some of the best ideas make it from the planning table to a successful business venture or law? And what kind of regulatory barriers exist that impede growth and stop good ideas from even making it out of the inception process?

The best ideas are often the result of planning, foresight, boldness, and smart decision making. But how do some of the best ideas make it from the planning table to a successful business venture or law? And what kind of regulatory barriers exist that impede growth and stop good ideas from even making it out of the inception process?

Regulatory barriers are like a constricting snake that kills. Take Rhode Island for example. The most burdensome state regulations in Rhode Island include over 300 rules governing daycare, wages, state contracts, labor relations, insurance rates, and the fire and food codes, according to a survey of hundreds of small business owners.

In the same survey, business owners said state regulations are the biggest challenge they face, second only to the rising health insurance costs, credit card issues, declining consumer demand, global competition, and new technologies. The average cost of compliance is greater than $2,000 a year.

According to the Tax Foundation, Rhode Island ranks 46th in the Foundation’s State Business Tax Climate Index which compares states in five areas of taxation that impact business: corporate taxes, individual income taxes, sales taxes, unemployment insurance taxes, and taxes on property. Higher taxes and fees often come with overregulation.

In the central Mississippi city of Petal, Larry Nobles, who owns a child-care center with his wife Marjorie, recently told the Mississippi Board of Health that when he started his business in 1973, regulations took up three pages. Now those regulations are more than 200 pages.

Looking at the big picture, according to the Heritage Foundation regulatory burdens on Americans increased by nearly $70 billion during President Obama’s first term. That makes the Obama administration one of the most regulatory in history, issuing 157 new major rules at a cost to Americans approaching $73 billion annually.

The Wall Street Reform and Protection Act (commonly referred to as Dodd-Frank) was responsible for some of the most problematic new rules of 2013. Under the Consumer Financial Protection Bureau, came four major new rules that restricted access to mortgage credit. According to the Heritage Foundation, each major rule represents costs in excess of $100 million per year. The rules will limit every aspect of financing for a new home and further expand government control over American’s lives.

Dodd-Frank alone that accounted for 13 of 26 new major rules issued during President Obama’s fifth year. But that doesn’t even come close to the rules concerning Obamacare. The law itself was so vaguely worded that it granted broad discretion to regulatory agencies. This put much of the authority in the hands of bureaucrats and out of the hands of those who we hold accountable.

Of course there’s always a need for certain regulations. They keep us safe. Without regulations, we would never know if the food we were buying would poison us; or if the semi-trailer on the highway might suddenly detach and wreak on top of us. But there is a fine line between safety, and egregious and excessive regulations.

Most importantly, bureaucrats that have a penchant for downplaying these regulations. Which is why elected policy makers must be watchful of rogue bureaucratic offices. Whether at the city, county, state of federal level lawmakers must be cognizant of how they are legislating and its overall impact. Commonsense must be the litmus test – not politics.

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