Bernie Bros, listen up: Federal Regulations increase corporate profits. Unfortunately, Sandernistas refuse to acknowledge the true source of the problem–big government–in order to simply focus on “soaking the rich,” which would have deleterious impacts on our economy.
According to a recent Boston University study, “since 2000 much of the rise in profits is caused by growing political rent seeking.”
For those who don’t know what rent-seeking his, here is a definition: “Rent-seeking is the use of the resources of a company, an organization or an individual to obtain economic gain from others without reciprocating any benefits to society through wealth creation. An example of rent-seeking is when a company lobbies the government for loan subsidies, grants or tariff protection. These activities don’t create any benefit for society; they just redistribute resources from the taxpayers to the company.”
So how do more regulations enable rent-seeking behavior? Simple. The bigger the government, the more incentive a company has to invest in the government.
A more complex tax system works in favor of established businesses because smaller businesses and upstarts cannot afford to hire lawyers and accountants to sift through the rules, whereas big companies do have those resources.
Regulations benefit large companies as they can afford to not only incur the costs, but also have the influence to decide how they are written. Regulations harm small businesses that cannot incur the costs and, oftentimes, are written in ways meant to reduce competition from new up-and-comers.
Sandernistas, take note: Citizens United is not the source of the problem–big government is. And this is no longer just theory; there’s now evidence to prove it.