Hidden Taxes and Regulation Keep the Economy from Growing

This country has become more and more and more regulated with each passing year. Nearly every part of our lives, and essentially, every single bit of our business lives, is touched (molested?) by government.

For all the talk of how the banks were deregulated prior to the crash of 2008, I can tell you first hand that this is absolutely not so in many ways.  The amount of paperwork involved in doing anything in a bank was massive thanks to any number of laws, but Sarbanes Oxley, and The Patriot Act were the most obvious regulatory burdens day to day.

Now we have Dodd-Frank layered on top of all the prior regs which essentially codifies a 2 tiered economy. Now there is Too Big to Fail, which has the backing and largess of the government at its disposal, and then everyone else. The “everyone else” is the heart of the economy, where jobs are created and ideas blossom.

Insurance is highly regulated. Anything to do with health care is highly regulated. Farming is regulated. Opening a business of any kind is highly regulated. Everything must be reported. Everything must meet certain guidelines if one wishes to stay within the good graces of the law. The TBTF guys have the resources to comply. Many of the smaller fish do not.

Add a Federal Reserve, which is repressing interest rates and making it very difficult to amass capital without significant risk, and it’s easy to see why this economy keeps sputtering.

(From the Washington Times)

The Fed also imposed the hidden tax of capital allocation as a result of its artificial low-interest-rate policies. Simply put, large institutions with strong balance sheets or companies that have been designated “too big to fail” (a few major financial institutions) can obtain all the loans they want at virtually zero interest. Smaller companies, particularly new ventures, are being restricted in their ability to get funds because of all the new regulations supposedly designed to reduce risk. Those regulations have the same effect as imposing a high tax on smaller firms and startups — which also happen to be the big job creators and innovators. In effect, we have created a system in which small, innovative firms are being “taxed” to subsidize large or government-favored enterprises.

Click here for the article.


"RAHN: Obama’s hidden-tax heist." Washingtontimes.com, 2012-12-24.

Nick Sorrentino

About Nick Sorrentino

Nick Sorrentino is the co-founder and editor of AgainstCronyCapitalism.org. A political and communications consultant whose clients have spanned the political spectrum, his work has been featured at Chief Executive MagazineBreitbartReason.com, NPR.com, Townhall, The Daily Caller, and many other publications. He has spoken at CPAC, The Commit Forum, The Atlas Summit, The US Chamber of Commerce, The National Press Club, and at other venues. Sorrentino is the CEO of Exelorix Consultants and a senior fellow at Future 500. A graduate of Mary Washington College he lives just outside of Washington DC where he can keep an eye on Leviathan.

John Wright
John Wright 5pts

Yes Larry I know. I'm one of them. It took me yrs to get where i am at, and still have a ways to go. I started out of nessessity. :)

Larry C. Fisher
Larry C. Fisher 5pts

John>>While I commend and respect what you've been able to do and accomplish economically, many Americans simply don't have the space and/or resources to create this type of lifestyle for themselves.

Curtis Owens
Curtis Owens 5pts

hidden maybe... but what about smart and needed regulations?

David Michael Swaim
David Michael Swaim 5pts

Yeah but Aiden all these states keep putting these loons back into office. Remember they want free stuff.

Aidan Haggerty
Aidan Haggerty 5pts

California is a sped up version of what the United States could become. Hawaii and several other states are in similar boats. Nevada doesn't have very much in jobs. Again, you're on the money ACC.

Craig Chapman CPMR
Craig Chapman CPMR 5pts

I tell all my business friends and acquaintances things aren't going to get better due to the facts you list above but somehow they "hope" that a positive uptick will happen anyway? #headinthesand

John Wright
John Wright 5pts

people need to change their way of living, at least for now. I use wood to heat(free) I carpool when ever possible and I don't go anywhere thats not needed. am growing alot of my own food (bringing down my food bill) and I use very little electric and am working toward a windmill and a couple of solar panels. I have to say, it took a little getting used to, but its very easy and very rewarding to my wallet. Just imagine if everyone used the bare minimum of fuel:) they would have so much they would have to dump it in the desert like shell got caught doing in the 80's or lower their prices. and electric is sky rocketing. I;m in Jersey, and JCPL raised their rates to pay for all the overtime hours occured after the storm. every lttle bit helps.

Calvin Bernhardt
Calvin Bernhardt 5pts

the building blocks of any economy are Energy and Food. both of these staples continue to escalate while real wages continue to fall. Depression.

Donald Chovan
Donald Chovan 5pts

The economy can't grow, when energy is sky high,& people are taxed to death