Small Businesses Pay Higher Costs To Meet Federal Regs

Small businesses pay a disproportionate amount per employee to meet the requirements of federal regulations.

According to a study for the Small Business Administration’s Office of Advocacy (summary, full report) the total cost in the U.S. to meet federal regulations in 2008 was $1.75 trillion. Yes, that’s trillion with a T.

So let me get this straight. First, the government is spending $4 trillion. Then it costs $1.75 trillion to comply with their regulations. If the economy is $14 trillion that means that government is 40% of the economy. And that’s just the feds – it doesn’t include state and local governments.

Not only that, but small businesses are paying a higher cost per employee than large businesses. According to the report, companies with less than 20 employees pay an average of $10,585 per employee while companies with over 500 workers pay $7,755. That’s 36% higher for small businesses.

Breaking it down by sector, small businesses pay 364% more per employee to meet environmental regs and 206% more for tax compliance.

And it’s just going to get worse with the health care bill, not to mention the latest attempt in congress to regulate all small farmers.

I recently read a book called Everything I Want To Do Is Illegal: War Stories From the Local Food Front by Joel Salatin that’s a fitting description of a small businessman dealing with federal regulators.

All I can say is “C”mon Tea Party!”