The cost of regulation

Last month’s testimony of Thomas Sullivan, the chief counsel for advocacy at the Small Business Administration, before the House Committee on Small Business includes some interesting data about the cost of regulation for small businesses. Sullivan reported the results of a 2005 study, The Impact of Regulatory Costs on Small Firms (PDF), which “found that, in general, small businesses are disproportionately impacted by the total federal regulatory burden. The overall regulatory burden was estimated … to exceed $1.1 trillion in 2004. For small firms, employing fewer than 20 employees, the annual regulatory burden in 2004 was estimated to be $7,647 per employee – which is 45 percent greater than the $5,282 per employee burden estimated for firms with more than 500 employees.”