Methodology

The Cost of Government is determined by adding the figures for government spending (federal, state and local expenditures) and an estimate of compliance costs of government regulations (both on the federal and state level).

The total cost of government is then divided by estimated gross domestic product (GDP) to determine the percentage of national income consumed by the government. This percentage is applied to the 365.25 weighted calendar year to determine the Cost of Government Day. Previous studies, before 2012, used the net national product to determine this. As a result, the Cost of Government day appears to occur sooner than all previous COGDs; however, adjusting for gross domestic product it is evident that this year’s COGD falls only three days earlier than 2011s. GDP is found to be far more appropriate measure of the economy as well as a more standardized measure.

All spending figures are based on calendar years and, among others, utilize Congressional Budget Office (CBO) reports, Bureau of Economic Analysis’ National Income Product Account (NIPA) data, and the National Governors Association and the National Association of State Budget Officers (NASBO).

State tax increases are derived from the NASBO data with three adjustments.

The calculation of Cost of Government Day for each state is based on the varying government burdens suffered in each state. Federal spending burdens vary because relatively higher burdens are borne by states with relatively higher incomes. Of course, state and local tax and spending burdens vary by state as well.

A 2010 report for the U.S. Small Business Administration Office of Advocacy by Nicole Crain and Mark Crain provided the framework for determining the cost of federal regulations.

Data on federal and state works was provided by the US Bureau of Labor Statistics and the US Office of Personnel Management.

The migration data was provided by the Internal Revenue Service Office (IRS).

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2012 Report

Case Studies

Methodology
Chart Room
COGD Launch Event: Sin Tax Party
Media Coverage
2011 Report