OPINION:
Vice President Kamala Harris is making a lot of promises headed into November. Every time the Democratic nominee commits the government to do something new, costs and red tape increase. The nation is already paying through the nose for the 5,338 major rules established while she and President Biden have been running the executive branch.
University of Chicago economist Casey Mulligan calculated the financial toll imposed by the current administration’s regulatory intemperance, concluding that Democratic rule has stuck American families with a $47,000 tab.
It’s all documented in a new Committee to Unleash Prosperity study that considered the per-household expense of everything federal agencies have done to augment the financial burden imposed on the public over the last 3½ years. Under this administration, that burden is nearly double what it was in the first four years under President Barack Obama and his vice president, Joe Biden.
Donald Trump had a different idea when he was in the Oval Office. He rolled back unnecessary dictates. By slashing regulatory expenses, he saved each household around $11,000.
The Biden-Harris team has reversed that progress, to the detriment of those least able to afford it.
“While the administration claims to pursue social goals, it is doing so at the expense of economic prosperity, disproportionately harming low-income families and stifling economic growth,” Mr. Mulligan said.
The study demonstrates regulation’s regressive impact. As a proportion of household income, the impact on the lowest-earning quintile is seven times as high as on the top quintile. Those at the bottom, Mr. Mulligan estimates, find their buying power reduced by 5% as a result.
The Green New Deal takes most of the blame, as regulation in the energy and environmental spheres is costly to implement and threatens to overwhelm tight family budgets. For example, ordering everyone to switch to partially or fully electric cars and trucks by 2031 is going to raise the sticker price on each new vehicle by more than $6,000.
This forced “upgrade” is a benefit only to the Chinese companies that are “saving the environment” by strip-mining, gobbling up the rarest minerals so they can be used in oversized car batteries.
Funding Uncle Sam’s new busywork isn’t cheap, which is why the Democratic candidate’s economic plan calls for raising the corporate tax rate to 28%, a 44.6% capital gains tax rate, price controls and a 25% tax on unrealized gains.
On a superficial level, those policy changes are meant to look as if they affect only fat cats and tycoons, but the opposite is true. Those schemes will make it more expensive to run a supermarket. The tax burden on mom-and-pop operations will skyrocket. Businesses across the country will have to raise prices even more than they already have.
Mr. Trump had the right idea with the tax cuts he implemented at the start of his presidency. That relief will expire if Ms. Harris becomes president, but for America to prosper, it needs to return to the path of economic growth.
That path means decreasing the burden of taxation while also reducing the federal regulatory burden. Both are needed to restore prosperity.
We’ve just tried nearly four years of the opposite strategy, and all we have to show for it is massive inflation and a stagnant economy. It’s time to return to a strategy that worked.
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