Regulatory Sandboxes Give States An Edge Attracting Innovation And Investment

Regulatory Sandboxes Give States An Edge Attracting Innovation And Investment

More states created or expanded regulatory sandboxes in 2021, a trend that will likely continue in ... [+] 2022 and beyond. The latest edition of the Competitive Enterprise Institute's 10, 000 Commandments, an annual report on the federal regulatory burden, estimates the total cost of federal regulations to be $1. 9 trillion in 2020. That means the federal regulatory burden faced by Americans is nearly equal in cost to combined federal individual and corporate income tax collections, which came in at $2. 076 trillion in 2020. For additional context, the cumulative cost of federal regulations is slightly less than the $2. 237 trillion in total 2020 pretax corporate profits. Since costly and overburdensome regulations are a challenge not just at the federal level, but also at the state level, many governors and state legislators have been busy proposing reforms and crafting policies that mitigate the cost of state regulatory burdens. Among the newer and more innovative approaches to providing regulatory relief in the states is what's called a regulatory sandbox. The concept of a regulatory sandbox comes from the United Kingdom, which instituted the world's first in 2016, one specific to the financial technology (fintech) industry. Regulatory sandboxes temporarily relieve