America Has Too Many Rules


(This article was originally published in The Wall Street Journal by Jimmy Sexton. Link to the article here.) 

If America wants to close the inequality gap, improve the quality of life of its citizens, make the government efficient and reduce taxes, it needs fewer and simpler laws and regulations.

More than 88,000 federal regulations were promulgated between 1995 and 2016, the most recent data I can find. The Federal Register, a compendium of each year’s new federal regulations, proposed rules and notices, totals nearly two million pages dating back to its inception in 1936. And the Code of Federal Regulations ran to 185,000 pages in 2020. In addition, state and local governments have their own laws and rules.

The government pumps out new rules and regulations daily—entire sections of government departments are dedicated to it. And each election cycle we elect politicians based on what they promise to accomplish. Fulfilling their promises means having a legislative agenda, which results in more laws, supported in turn by rules and regulations written by unelected bureaucrats.

At some point the system will become unmanageable. It arguably already has. There is no way anyone can know enough to avoid inadvertently violating all the laws, rules and regulations. According to lawyer and author Harvey Silverglate, the average American unintentionally commits three felonies a day.

To have any hope of complying with the law and managing your life within the system, you need an army of specialized lawyers, accountants, tax preparers, consultants, advisers and advocates. Even a simple decision like signing up for Social Security or Medicare risks making an irreversible mistake that may result in diminished benefits.

Laws should be easy to comply with and simple to enforce. Overlegislation is also an enormous burden on the government. Many new laws require rules and regulations to implement and then they have to be enforced. If a law is challenged, it must be resolved by a court. All this requires enormous manpower, paid for by taxes.

Many argue that the system is rigged in favor of the rich. The advantage the rich have is that they can afford to hire experts to navigate an impossibly complex system. Taxing the rich more heavily won’t reduce inequality. It will merely feed the bloated government.

We need a simpler and lighter system. At some point, as a nation, we need to stop trying to do more, take a pause, and fix what we have. Instead of adding new laws, get rid of needless ones, and rewrite necessary ones to be clear, concise, and easy to understand and follow.

Donald Trump was on the right track with his rule that for every new regulation, the government must get rid of two old ones. Congress might consider coming up with a version of its own.

Mr. Sexton is founder and CEO of Esquire Group, a tax and wealth advisory firm.