Inefficient by Gregg Motley

Gregg Motley. President of the Regional Economic Development, Inc. Submitted photo.

Inefficient

Business owners and farmers know that for an enterprise to be successful, it must be run efficiently. No room exists for unnecessary expenses or wasted efforts. The burden that has been placed on our businesses and farms by governments at all levels in recent decades is a tragedy, especially in rural America.

For example, it costs between $140 billion and $215 billion a year for businesses to comply with IRS rules and file a tax return, according to the Washington Post in a 2018 article. This cost has accelerated significantly over the years, primarily because of the increasing complexity of the tax code. From the time the income tax was passed in 1913 to 1940, the code was just a handful of pages and the average American had no problem filing a return. From about 1940 to 1950, the code grew to over 10,000 pages, and is approaching 80,000 in 2021. This gross inefficiency costs us an untold loss of productivity and makes us less competitive with overseas firms; thus, we lose more American jobs to foreign competition every year.

Another example: I recently wrote a column about the burden of government regulation on our business community, noting that from 1970 to 2017, the number of words in the Code of Federal Regulations nearly tripled from 35 million to over 103 million, according to a 2019 article published on Forbes.com, authored by Adam A. Millsap. His study showed that a 10% increase in regulation increases consumer prices by 1%. Another inefficiency that American businesses cannot afford.

Additionally, government programs like the Small Business Administration (SBA) are structured such that rural businesses have a difficult time qualifying and paying all the costs. For example, if I want the SBA to help me finance a new building or addition in which to house my business, I must hire a professional engineer and a professional architect and pay union wages to construct it, accelerating the costs dramatically. The program is nearly worthless in Bourbon County.

How do inefficiencies disproportionately impact rural America? The additional costs due to inefficiencies drives industry consolidation to save overhead costs. Invariably, that means shutting down branch offices in lower population areas or selling the business to a larger entity. Bourbon County experienced that pain directly when we lost Western Insurance.

We cannot continue to absorb the growth in these government inefficiencies. We have to look to simplify the way we raise revenue and lower the government burden for rural Americans. Our economic future and our rural way of life depend on it.

One thought on “Inefficient by Gregg Motley”

  1. How do we do this? Do we need a one on one conversation with our Kansas Secretary of Commerce? Governor? We need legislators to help! Decrease unnecessary regulations.

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