In this new CEI video, my colleague Lee Doren and I talk about the budget debate.
Politico headline from today: “Qualcomm exec calls for small-business research funding.”
Alternative headline: “Businessman asks government to give money to businesses.”
Government should not give money to private businesses, period. Businesses should compete in the marketplace, not Washington. There is a lot of money to be made by selling people things they want. Companies that do a good job of that deserve every cent they earn.
Subsidies are not earned. Nor are they given to companies make things people want. Companies already doing that don’t need handouts. In short, corporate welfare is allocated by politics instead of economics.
What Mr. Jacobs is asking for would be a boon for lobbyists and politically favored businesses. But it would be a drag on everyone else. And not only because they would be paying for the handouts. Lost innovations are part of the price. The money spent on corporate welfare is money not spent on more worthy projects.
See also Wayne Crews and I on corporate welfare in the new edition of CEI’s Agenda for Congress.
Posted in Economics, Public Choice, Spending
Tagged cei agenda for congress, corporate welfare, dueling headlines, headlines, irwin mark jacobs, politico, qualcomm, Ryan Young, subsidies, wayne crews
Congress never actually votes on most regulations. Over 3,500 regulations hit the books most years. But Congress usually passes fewer than 200 bills per year. 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.
Posted in Publications, regulation
Tagged deregulate to stimulate, geoff davis, ibd, investor's business daily, rand paul, regulation, regulation without representation, REINS Act, Ryan Young, wayne crews
President Obama signed an Executive Order this week that will initiate a “government-wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive.”
Over at AOL News, Wayne Crews and I explain why this will hardly change a thing. We also offer 6 suggestions for reducing regulatory burdens with a minimum of political pain. Here are three of them:
- Appoint an annual bipartisan commission to comb through the books and suggest rules that deserve repeal. Congress would then vote up-or-down on the repeal package without amendment, to avoid behind-the-scenes deal-making.
- Require all new regulations to have built-in five-year sunset provisions. If Congress decides a rule is worth keeping, it can vote to extend it for another five years.
- Consider Sen. Mark Warner’s, D-Va., “one in, one out” proposal, which holds that for every new rule that hits the books, an old one must be repealed.
Read the rest here.
Posted in Publications, regulation
Tagged aol news, bipartisan commission, executive order, obama, regulation, regulatory burdens, regulatory reform, regulatory reform commission, Ryan Young, sunsets, wayne crews
Have a listen here.
Fellow in Regulatory Studies Ryan Young looks at the IRS’ proposal to save you time by doing your taxes for you. Because you would be liable for any of the IRS’ mistakes, you would still have to check over your return. This negates much of the time savings. It could also cost employers as much as $5 billion in increased reporting requirements. Then there is the conflict of interest between your collector also being your tax preparer.
Posted in CEI Podcast, Economics, Taxation
Tagged irs, michelle minton, paye, regulation, return-free income tax, Ryan Young, tax, tax policy, taxes
This week I switch from host to guest. Have a listen here.
Fellow in Regulatory Studies Ryan Young explains how an IRS proposal for mandatory certification of tax preparers would hurt consumers and taxpayers. It is one more example of how regulation can hurt competition. Large tax preparation firms would benefit at the expense of individuals and smaller firms who can’t afford the added regulatory burden.
Posted in CEI Podcast, Economics, Media Appearances, regulation, Taxation
Tagged competing in washington, competition, h&r block, irs, marc scribner, ptin, regulation, Ryan Young, tax law, tax preparation, taxes
The IRS wants to require all tax preparers to register with them, pass an exam, and take continuing education classes. Over at Investor’s Business Daily, Caleb Brown and I explain why that would hurt consumers and taxpayers. Our main points:
-Since the IRS has the power to revoke registrations, tax preparers will have to be careful not to advocate too aggressively for their clients.
-There are at least 600,000 unregistered preparers. Many of them are retirees. Others have jobs, but prepare taxes on the side to help make ends meet. Still others are volunteers. They give their services for free to people who can’t afford a tax preparer. How many will give up, rather than jump through the proposed regulatory hoops?
-Big firms — with more than 500 employees — pay $7,755 per employee per year to comply with federal regulations. Their smaller rivals have to pay a whopping $10,585 per employee per year. That’s a built-in competitive advantage of nearly $3,000 per employee, courtesy of Washington. No wonder so many businesses have D.C. offices these days.
-H&R Block alone spent nearly $1 million on lobbying in the last half of 2009, much of it pushing for these very tax-preparer regulations. It wants the deck stacked even further in its favor.
-The best solution to this problem is simplifying the tax code. There is no legitimate reason for the tax code to be so complicated that most people have to turn to others for help.
Posted in Economics, Publications, regulation, Taxation
Tagged bluegrass institute, caleb brown, cei, h&r block, irs, regulatory capture, Ryan Young, tax code, tax code simplification, tax preparation, tax preparers, tax regulation, taxes