Maybe over regulated is the wrong phrase as I’m not really passing judgment on the soundness of the regulations. It’s just that people who run truly small businesses can deal with a lot of headaches with their local municipalities, and because they’re genuinely small businesses they don’t really have the staff to deal with it.
One of the poll questions explicitly mentions the federal government, but I don’t think people distinguish that much.
I suppose the problem here is that you can’t really speak of a lump sum of regulations. The level of air pollution that companies can emit is underregulated in the United States, especially with regard to greenhouse gasses. We also seem to me to not do enough, regulation-wise, to prevent certain kinds of gender discrimination in the workplace—though this is an issue that the 111th Congress is making progress on. On the regulations aimed at ensuring workers’ rights to form a union are pathetic.
At the same time, the absence of regulations we should have doesn’t make the addition of regulations we shouldn’t have any better. The District of Columbia has a special board to regulate barbers and cosmetologists composed of—you guessed it—incumbent barbers and cosmetologists who have ever incentive to simply cut down on the level of competition they face. More seriously, most jurisdictions have rules in place that prevent dental hygenists from going into business for themselves as providers of tooth-cleaning services. Instead, to practice their trade they need to be working for a dentist who gets a cut of the revenue. In Indiana you need a license to be an auctioneer. For some reason authorities in Britain won’t let this guy live in a miniature castle.
Regulatory capture—where the businesses government is supposed to be keeping an eye on instead start running the regulatory game to protect themselves from competition—is a very real problem. And as Neil Sinhababu observes it’s an especially big problem with state and local government, where voters tend not to be paying attention to what’s happening.