NCPA - National Center for Policy Analysis

Red Tape Rises Again: Cost of Regulation Reaches $1.75 Trillion

September 29, 2010

While the revenues and expenditures of the government are budgeted and accounted for each year, the costs of regulation are largely hidden from view, paid for indirectly via higher prices, fewer choices and less innovation.  The best estimates of the total cost, however, have come from a series of reports commissioned by the Small Business Administration (SBA).  The latest such report was released recently by the SBA's Office of Advocacy and the results are startling, says James Gattuso, a senior research fellow in regulatory policy at the Heritage Foundation.

  • Rules and restrictions imposed from Washington now cost Americans some $1.75 trillion each year.
  • That is sharply higher than the $1.1 trillion in costs reported in 2005 in the SBA's last study.
  • Some of this increase comes from identification of regulatory costs that were not included in earlier reports, yet much represents new regulatory burdens -- including a $445 billion increase in the cost of economic regulation.

No matter how you slice it, $1.75 trillion is a lot of money, says Gattuso.

  • It is far more than Americans pay in income taxes each year.
  • It is about the same as the gross domestic product of Italy.
  • Per household, the regulatory tab works out to some $15,000 -- almost as much as the average family spends on housing.

Source: James Gattuso, "Red Tape Rises Again: Cost of Regulation Reaches $1.75 Trillion," Heritage Foundation, September 22, 2010.

For text:


Browse more articles on Economic Issues