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To Do: Reform the Regulatory Flexibility Act to Benefit New Firms

To Do: Reform the Regulatory Flexibility Act to Benefit New Firms
Knowledge Base Article in: Tech Policy To-Do List
Last Updated: February 7, 2025

Recommendation

Congress should reform the Regulatory Flexibility Act to focus on helping new firms.

Details

The Regulatory Flexibility Act allows the Small Business Administration to review the impact of regulations on small businesses. The result is to unfairly exempt small, usually less-productive and lower-wage businesses from the obligations other companies face, thereby distorting economic activity. Congress should refocus the act on new businesses younger than two years old and even consider exempting these businesses from most regulations as they develop and implement their business plans.

Keep reading:

Robert D. Atkinson and Michael Lind, Big is Beautiful: Debunking the Myth of Small Business (Cambridge: The MIT Press, 2018), 265, https://itif.org/publications/2018/04/06/big-beautiful-debunking-myth-small-business/.

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