The cost of compliance with state and federal regulations amounts to an additional tax on business. According to the Small Business Administration Office of Advocacy, "small businesses pay an average of $6,975 per employee annually to comply with federal regulations -- 60% more than large businesses. Yet, small businesses generate 60-80% of all net new jobs, represent 99.7% of employers, employ have of all private sector employees, and innovate at a rate 13 times greater than large firms."

Originally published July 14, 2005.