America’s Economic Growth Triggers
Status Report on Regulation, Taxation, Litigation
WASHINGTON, DC – The Senate Budget Committee today released its May 18, 2017, Budget Bulletin focused on America’s Economic Growth Triggers. The Budget Bulletin provides regular expert articles by Senate Budget Committee analysts on the issues before Congress relating to the budget, deficits, debt, and the economy.
Read the full Senate Budget Bulletin here.
The federal government is currently focused on boosting American economic growth with new policies that encourage private investment, entrepreneurship, and innovation. According to the Congressional Budget Office (CBO), a mere 0.1 percent increase in productivity growth could reduce the deficit by $273 billion over a 10-year period.
Overall, federal regulations burden the economy in two ways: the cumulative burden of existing regulations and the continuing flow of new ones annually. The Mercatus Center at George Mason University estimates that the growth of regulation since 1980 slowed the growth of the economy by an average of 0.8 percent annually and cost the economy roughly $4 trillion in GDP in 2012 alone.
Taxation affects the economy by changing the relative trade-off between high-taxed and low-taxed alternatives. Concerning labor, taxes reduce wages, making workforce participation less desirable. Concerning capital, taxes reduce profits, making investment less desirable. Together, less labor and capital result in a smaller economy and a lower standard of living.
The American legal system is one of the most litigious in the world. Litigation imposes various types of costs that the disputing parties have to pay. For example, the parties likely will be responsible for paying their own attorney, may have to pay a fee to the court, and frequently will need to provide the funds required to take depositions or to hire expert witnesses. Litigation costs even can dictate whether and how the parties will choose to proceed with their case.
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