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Regulations Inhibit Growth, Time to Take The Negative Consequences Seriously

in Business and Economy, Economic Liberty, Liberator Online, News You Can Use by Alice Salles Comments are off

Regulations Inhibit Growth, Time to Take The Negative Consequences Seriously

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Regulations are good, some say. They keep evil elements from hurting consumers. But are regulations doing more harm than good?

By definition, regulations are laws that seek to produce pre-designed outcomes. The way they operate is by changing individuals’ behavior. As federal regulations grow, the number of restrictions on individual consumers and businesses also grow. Over time, the increased number of restrictions may completely close the paths to innovation. Who suffers? Both the consumer and the job seeker.

Regulations

According to a 2013 study, the American regulatory system is so crowded and chaotic that economic growth has slowed by about 2 percent per year between 1949 and 2005. While that doesn’t sound as bad as you might have expected, the real impact of the US regulatory system is hard to assess given the lack of a working process that helps to review regulations and weed out what’s obsolete and harmful. Without a system that helps us identify the issues with the regulations put in place, there’s no way to determine how bad these regulations really are.

While it’s hard to assess the cost of regulation now, earlier studies have at least been able to find that the American regulatory environment has been very bad for growth and very good in stifling innovation and keeping entrepreneurs from sprouting from sea to shining sea.

Despite several administrations’ efforts to modify or cut regulations that simply don’t work, all attempts were in vain.

In order to achieve success, future administrations should not take part in the same failed attempts. According to research carried out by the Mercatus Center, the US government should embrace a series of government reforms in order to remove obstacles to economic growth in America instead.

Based on the success of the Dutch Administrative Burden Reduction Programme and the Base Realignment and Closure Commission’s efforts, the Mercatus team concluded that the American government should begin by promoting an independent review of the regulatory system in place so the burden is assessed promptly and effectively.

But the key to success in this case is true independence.

An independent look into what’s stifling innovation must not be effected by crony influences, since once the influence of particular groups or stakeholders are taken into account, review teams will have a hard time assessing what works and doesn’t. Instead, those tasked with the chore of reviewing regulations should simply focus on how effective regulations have been since they were implemented.

While other steps should also be taken if the US government is serious about trimming the burden of regulations, guaranteed independence in the review process is the most important aspect of successful reforms. If future administrations are serious about growing the economy and helping America prosper, they should prioritize this type of reform. Why? Because removing roadblocks promote the growth of businesses, giving Americans the jobs they so desperately need to live their own version of the American dream.

Free the Hops: Sin Taxes Drive Up the Cost of Beer

in Economic Liberty, Liberator Online, News You Can Use, Personal Liberty, Taxes by Jackson Jones Comments are off

Free the Hops: Sin Taxes Drive Up the Cost of Beer

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Your favorite frothy adult beverage would be a little cheaper if sin taxes were not part of the equation, according to a new report from the Tax Foundation, a nonpartisan policy research center.

Each state taxes beer by the gallon, with the costs ranging from just 2 cents in Wyoming to $1.29 in Tennessee.

“State and local governments use a variety of formulas to tax beer,” Scott Drenkard writes at the Tax Foundation. “The rates can include fixed per-volume taxes; wholesale taxes that are often a percentage of a product’s wholesale price; distributor taxes (sometimes structured as license fees as a percentage of revenues); case or bottle fees (which can vary based on size of container); and additional sales taxes (note that this measure does not include general sales tax, only those in excess of the general rate).”

There is a trend to be found in the rates, as well. States in the Southeast tend to have the highest beer taxes. Seven of the top 10 states with the highest beer taxes are located in the area of the country known as the “Bible belt.” Northeastern states tend to have lower beer taxes.

Beer Tax

Beer Tax

The Beer Institute estimates that consumers pay $5.6 billion in federal and state excise taxes annually. “Surprisingly, taxes are the single most expensive ingredient in beer,” the beer centric think tank notes, “costing more than the labor and raw materials combined.”

Although the Tax Foundation report does not touch on the cost of federal and state regulation of beer, which adds to the cost of production, particular of micro-breweries and small craft beer producers.

In a June 2014 editorial at US News, Matthew Mitchell and Christopher Koopman, both research fellows at the Mercatus Center, explained that the excessive regulations, which are just another form of taxation, create burdensome barrier to entry for small brewers looking to take their product to market.

“Once in business, brewers face more hurdles. Among the least efficient regulations are the ‘franchise laws’ that restrict their ability to sell beer directly to consumers, instead mandating that they sell through distributors. These rules can even dictate how brewers may contract with distributors,” wrote Mitchell and Koopman. “For example, some grant distributors exclusive territories, and others limit the ability of a brewer to choose to work with someone else. A recent survey found that in most cases, these rules make consumers worse off.”

Beer taxes may be an easy target for lawmakers looking to raise revenue for big government programs and regulation may be a convenient way to protect big beer brewers, but these policies are keeping Americans from the frothy goodness that is their favorite brew. Raise a glass and tell your lawmakers to “free the hops!”

Cosmic Bowling, Gutterballs and Liberty

in Communicating Liberty, Liberator Online, One Minute Liberty Tip by Sharon Harris Comments are off

(From the President’s Corner section in Volume 19, No. 13 of the Liberator Online. Subscribe here!)

A couple of weeks ago I found myself giving bowling lessons — of a sort — to a Sharon Harris - Bowlinggroup of bright young libertarians.

More specifically, I demonstrated to them the fine art of… throwing gutterballs. Over and over. Right and left. How embarrassing!

Thankfully, I wasn’t there to teach these young libertarians bowling. The bowling event — “Cosmic Bowling” — was just a fun extracurricular evening activity at the Foundation for Economic Education’s “Communicating Liberty 2014: Advanced Training” seminar in Atlanta. This great event brought libertarian communication ideas to some of the brightest young minds in the liberty movement.

Forty outstanding student alumni of the Foundation for Economic Education (FEE) summer programs attended the invitation-only event. Without exception, the students I met and talked with were smart, articulate, and enthusiastic proponents of the ideas of liberty. What a joy it was to meet them!

Communication Training - AtlantaI had the pleasure of giving a libertarian communication workshop — sharing the very best tools, techniques and tips on communicating the ideas of liberty. The students were eager to learn and practice the libertarian communication essentials I presented.

FEE brought together a truly outstanding combination of student leaders and libertarian communicators. Speakers included Bob Ewing of the Mercatus Center, Anna Ridge of the Charles Koch Institute, and of course Lawrence Reed, president of FEE and one of the finest spokesmen for liberty of our time.

I left the event humbled by my bowling abilities — but excited about the future of liberty in America. With such gifted and enthusiastic young people gearing up to be the liberty leaders of the next generation, the future looks bright indeed!

FEE is doing outstanding work with its outreach to young people, and I was proud to be a part of this great program. FEE is the oldest libertarian think tank in America — it is impossible to imagine today’s libertarian movement without its pioneering work — and it continues to do cutting-edge essential work in educating the public and reaching out to rising young libertarian leaders to prepare them to be ambassadors for liberty.

I strongly recommend that Liberator Online readers learn more about the great things FEE is doing.

To learn more about Advocates libertarian communication workshops, visit here.