Mmmm, I’d say it’s on a sliding scale.
Compliance and tax costs can be reduced to a very small percentage of revenue once the size of the business becomes very large, depending on how aggressive a tax strategy the management chooses.
For small business, however, those costs tend to be much higher.
I remember my barber showing me the permits on the wall for each shampoo station. It’s just the tip of the iceberg. The government is the mafia in a very real way.
When looking at the entire iceberg, it is why I will never go into “legitimate” business for myself. No way. Not worth the headaches.
The only exception would be if it was the only way to survive.