Wintery Knight

…integrating Christian faith and knowledge in the public square

Report: Obamacare regulations will cost taxpayers and businesses $1.8 trillion

The Washington Examiner explains.

Excerpt:

Current federal regulations plus those coming under Obamacare will cost American taxpayers and businesses $1.8 trillion annually, more than twenty times the $88 billion the administration estimates, according to a new roundup provided to Secrets from the libertarian Competitive Enterprise Institute.

And it could grow, warned the author of the report, Clyde Wayne Crews, a CEI vice president.

[...]“While OMB officially reports amounts of only up to $88.6 billion in 2010 dollars,” said Crews, “the non-tax cost of government intervention in the economy, without performing a sweeping survey, appears to total up to $1.806 trillion annually.”

But, he added, “according to back of the envelope surveys and roundups, with gaps big enough to fit the beltway through, that up to $1.806 trillion annually and in many categories perhaps even considerably more, is a defensible assessment of the annual impact on the economy.”

His estimate is close to the $1.7 trillion estimate from the Small Business Administration which the White House distanced itself from. For comparison, the total U.S. GDP is $15 trillion.

How might higher taxes and heavier regulations affect those who want to start businesses or expand them?

Breitbart reports on a new report from the Hudson Institute:

Startup businesses represent the heart of the American economy, but a new report by the Hudson Institute shows the rate of startup jobs during the last two years has been at a record low.

According to the report, Under President George H.W. Bush, who essentially won Ronald Reagan’s third term, there were 11.3 startup jobs per 1000 Americans. Under President Bill Clinton, there were 11.2. Under George W. Bush, there were 10.8. But under President Barack Obama, there have been 7.8 startup jobs per 1000 Americans.

The study “documents a disturbing weakness in startup job creation,” but “does not explain the cause of decline,” even though “there is anecdotal evidence that the U.S. policy environment has become inadvertently hostile to entrepreneurial employment.”

The American Enterprise Institute highlighted four key findings of the report.

First, the report found that “at the federal level, high taxes and higher uncertainty about taxes are undoubtedly inhibiting entrepreneurship, but to what degree is unknown.”

Second, Obamacare created a “sweeping alteration of the regulatory environment that directly changes how employers engage their workforces.” The report notes it will take time until employers and scholars understand those changes.

Third, since 2009, the Internal Revenue Service has engaged in more vigorous crackdowns on “U.S. employers that hire U.S. workers as independent contractors rather than employees, raising the question of mandatory benefits.” This directly impacts startup businesses and potentially has a chilling effect on those thinking about beginning new business ventures.

Fourth, the report cites barriers to entry at the local levels, including “the rise of occupational licensing” that “is destroying startup opportunities for poor and middle class Americans.”

“The state of entrepreneurship in the United States is, sadly, weaker than ever,” the report concludes.

What happens when we burden our employers with huge tax increases and costly regulations? They stop hiring us and they ship their businesses out of the United States. Obama is doing everything he can to discourage businesses from starting up, hiring and expanding here at home.

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