investor’s business daily

Substantive Reform Must Include Cutting Regulatory Burdens

by Ryan Young on April 28, 2011

in Economy, Regulation

Spending, deficits, and taxes are getting all the attention from reformers in both parties. In today’s Investor’s Business Daily, Wayne Crews and I argue that regulation is not to be forgotten:

Regulations cost the average business $8,086 per employee per year. Small businesses are especially hard-hit. Firms with fewer than 20 employees pay $10,585 per employee per year for regulatory compliance, according to the Crains’ report. When hiring employees becomes more expensive, fewer get hired. No wonder unemployment is so persistent.

We also offer up some reform ideas:

One reform is to purge the books of obsolete and clearly harmful rules. There is no need for Washington to have rules still on the books for a Y2K crisis that never even materialized. Nor is there any need for it to regulate the size of holes in Swiss cheese, which it does in great detail.

President Obama should appoint an annual bipartisan commission to comb through the Code of Federal Regulations and recommend rules for elimination. Congress would then be required to vote up-or-down on the package without amendment.

Read the article here; for more intellectual ammunition, see the just-released 2011 edition of Wayne’s “Ten Thousand Commandments” study.

Eliminate the Cap on H-1B Visas

by Ryan Young on February 18, 2011 · 1 comment

in Economy, Employment

My colleague Alex Nowrasteh has an op-ed in Investor’s Business Daily where he makes the case for liberalizing the H-1B visa for skilled immigrants.

An oft-neglected point he makes is that if companies can’t legally get the workers they want to come here, they’ll just go abroad to hire them. As with most anything else, prohibiting or limiting immigration comes with unintended, but not unforeseeable consequences.

Read the whole thing here.

Regulation without Representation

by Ryan Young on February 9, 2011 · 1 comment

in Deregulate to Stimulate, Regulation

Congress never actually votes on most regulations. Over 3,500 regulations hit the books most years. But Congress usually passes fewer than 200 bills. As Wayne Crews and I explain in today’s Investor’s Business Daily, this is regulation without representation.

Only Congress, and not agencies, have the power to legislate. But that is exactly what is happening now. Bills to regulate carbon emissions, regulate the Internet, and more all failed in Congress. But agencies are enacting rules. If you can’t legislate, regulate. This is wrong.

It allows politicians to escape blame for unpopular or controversial regulations. Don’t blame me, blame bureaucrats! It also gives agencies little incentive to rein in their worst impulses. If they can do whatever they want, they will work to expand their budget and authority.

The first step in solving the problem of regulation without representation is requiring Congress to vote on major regulations. Not all regulations — 3,500 votes is a bit much. And agencies do deserve some independence on administrative affairs and minor detail work.  But requiring 200 votes on major rules costing at least $100 million each is the least Congress should do.

The REINS Act, recently introduced by Rep. Geoff Davis and Sen. Rand Paul, would do just that. There are many facets to regulatory reform. There is much more to do. But putting a damper on regulation without representation is a good start.

You can read Wayne’s and my article here.

Against a Value Added Tax

by Ryan Young on November 17, 2009

in Deregulate to Stimulate, Economy

Over at Investor’s Business Daily, Wayne Crews and I make the case against a Value Added Tax. Policy makers have been flirting with the idea as a way to reduce the $1,400,000,000,000 budget deficit.

We argue that a VAT is:

-Complex; it would require roughly doubling the size of the IRS.

-Untransparent; most VATs don’t show up on receipts the way sales taxes do. Taxpayers are clueless as to how much tax they actually pay.

-Vulnerable to special-interest tinkering; politically incorrect goods are routinely penalized with higher rates. Politically favored goods are granted exemptions.

-Prone to increases; 20 out of 29 OECD countries with a VAT have increased their rates since implementing a VAT.

A point we didn’t make is that VATs affect industrial organization. VATs are applied at each stage of the production process. That gives companies an incentive to reduce the number of taxable steps. That means more vertical integration than would otherwise occur. This can decrease the efficiency of the manufacturing process. Which means higher prices and fewer goods. Plus the tax.