Data: Treat the Rich

Kerry Howley from the January 2006 issue

Federal regulations are often sold as a way to rein in the biggest, most powerful corporations. Complicated accounting rules, tax requirements, and workplace regulations may eat up billions a year in compliance costs, but the alternative, it's assumed, is giant companies with unchecked power.

But some recent number-crunching by the U.S. Small Business Administration reveals that it's mom-and-pop outfits, not big box behemoths, who are hardest hit. Per employee, businesses with less than 20 workers shell out $7,647 for a combination of federal environmental, workplace, tax compliance and trade regulations. Businesses with more than 500 employees pay about 45 percent less a head. With federal expenses so far out of whack with the scale of U.S. businesses, it may be easier for the bigger players to survive all that red tape.

Graph (not available online): Cost of Regulations Per Employee (in 2004 dollars)