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In 2002, how much do you think the US spent on compliance with federal regulations? Can't guess? Here's some points of reference:
- Federal government spent $2.01 trillion (2002)
- Pretax profits of all companies was $699 billion (2001)
- $949 billion was collected from individual income tax (2002)
- $201 billion was collected from corporate income tax (2002)

The answer... $860 billion. More money was spent on compliance with federal regulations than pretax profits of all companies. It was roughly equal to 90% of collected individual income tax and 4 times more than collected from corporations. It was also equal to 43% of what the government actually spent.

The compliance costs breaks down as:
- $132 b for tax compliance
- $201 b for environmental compliance
- $84 b for workplace compliance
- $444 b for economic compliance

So for those who think we don't have too much government, I would argue that when it costs more to comply with governmental regulations than all the pretax profits of US companies, then we have too much of the government meddling with the private sector.

Links:
10,000 Commandments - CATO
Budget of the United States Government - GPO
Gross Domestic Product or Expenditure, 19302002 - InfoPlease
Population - InfoPlease

Posted: 2003-07-11 17:07:01


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