In the U.S., July 4th is the day we celebrate our freedom. On that day in 1776, the Declaration of Independence was adopted, forever breaking America free from the shackles of the British government.
But 236 years later, we find ourselves shackled again by our own overzealous government. State and federal regulators shackle us with regulations that drain trillions from the U.S. economy. States and the federal government have shackled American companies with the highest corporate income tax in the world. And excessive and wasteful spending by Congress has shackled America’s future with a debt that now equals our total annual economic output.
The federal government does not calculate the costs of regulations; however, a 2010 report from the Small Business Administration estimated the cost at $1.75 trillion, almost double the total Americans pay in personal income taxes. Not only do these regulations impose a hidden tax that is passed on to consumers, they also impact us on everything from fast food to how much water we can use to flush our toilets.
The U.S. corporate income tax rate, including state and federal taxes, is now 39.2 percent. This makes U.S. companies less competitive, leaves them with less money to invest in business expansion and less for creating new jobs. Consequently, we pay higher prices for goods and services, have fewer job opportunities and see our retirement savings dwindle as companies struggle to stay competitive and still make a profit.
Government debt in the U.S. is now equal to 100 percent of our Gross Domestic Product (GDP). In other words, the federal debt of over $15.2 trillion now equals the value of all that our economy produces in a single year. That’s over $48,000 for every American. According to the non-partisan Congressional Budget Office (CBO), if we continue at the current pace, the national debt will be 113 percent of GDP by 2015 and 194 percent by 2030.
All of these factors make us more dependent on government and less free. Others might look at these same factors as necessary to make American society more equal by increasing taxes on corporations and the rich and putting more regulations on the economy.
The problem with that argument is two-fold. First and foremost, corporations don’t pay taxes, people pay taxes. Corporate taxes get passed on in the form of lower wages and benefits for their employees, lower earnings for their investors, and ultimately, to consumers in the cost of goods and services. It is the same with other taxes and regulations. Raise the tax on a gallon of gas and you and I pay at the pump. Impose draconian regulations on utility companies and we pay for them in our energy bills. Set corporate income tax rates at the highest level in the world and we pay it on everything from automobiles to toothpaste.
But you and I have no one to pass these higher costs to except ourselves and our families.
These burdens, especially excessive regulations, weaken our economy by draining away resources that could be used to create more jobs and pay higher wages. Moreover, excessive regulations and distortion in taxation undermine our individual freedom, not only because individuals have less to spend, but also because of the way state and federal governments have undermined free enterprise.
In the Declaration of Independence, our Founding Fathers articulated precisely that each and every individual has the God-given right to “Life, Liberty, and the Pursuit of Happiness. “ The Founders would have explained that free enterprise—the right of individuals to pursue their own interests, invest their own time, their resources and their own talents and abilities to support themselves and their families—is what they meant by the “pursuit of happiness.”
We are now governed by a regime that allows the killing of millions of unborn Americans whose contributions to our quality of life will never be realized. We live with governing regulations that systematically undermine our liberty by imposing excessively high taxes and regulations that impact each of us right down to the most mundane aspects of our daily living. And we live under a governing regime that has justified an agenda of redistribution of wealth by redefining the “pursuit of happiness” to mean the “pursuit of equality of outcomes.”
Now, 236 years later, our government is making Americans increasingly less prosperous, more dependent and less free to pursue our own happiness.