Small Biz Watch: The government's other take
This may not come as a shock to anyone who has managed a business–either large or small–but it costs a lot of money to play by the rules. And in at least one way, the burden falls more heavily on small businesses than on the Fortune 500.
According to a new study by the Small Business Administration, small companies spend considerably more per employee to comply with government rules than do big firms. The agency found that firms with fewer than 20 employees spend $7,647 per worker each year to comply with federal regulations. Companies with 500 or more employees spend just $5,282 per worker.
The rules accounting for the biggest chunk of the differential tend to be environmental and tax regulations. Complying with environmental rules costs 364 percent more per employee in small firms than in large ones. Abiding by tax rules is 67 percent more expensive in small businesses. Still, there's plenty of pain to go around:
The total cost for all federal regulations is some $1.1 trillion per year–11 percent of gross domestic product–-according to the SBA. That's up 16 percent since 2000 when adjusted for inflation.
The complete SBA study: www.sba.gov (PDF)
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