Read NFIB's Minnesota State Director Mike Hickey's op-ed in the Duluth News Tribune.
Minnesota NFIB state director Mike Hickey explains how a bill the House could vote on any day, The Corporate Transparency Act, could devastate small businesses across Minnesota.
Corporate Transparency Act, a data compliance nightmare for small business!
When you think about organized crime, Minnesotans are probably the last people who come to mind. But some politicians in Washington, D.C. are under the impression that people from the state known for being nice are harboring Mafiosi or terrorists—and that those terrorists are hiding in our state’s small businesses, of all places. To address this supposed crisis, Congress is debating a bill that would wrap small businesses in red tape. Our representatives should vote to stop this madness.
The “Corporate Transparency Act,” specifically targets small businesses, ignoring larger companies altogether. If this sounds backward, that’s because it is. Small businesses are the least able to handle the burdens of one-size-fits-all regulation. They’re too busy doing what they do best: Creating jobs and boosting our economy.
Half of the state’s workforce is employed by small businesses, and firms with 20 or fewer employees—the kind targeted by this bill—provided the largest job growth in recent years. That means the smallest firms are punching above their weight class.
These are the hallmarks of legitimate, high-functioning businesses, not of mob fronts. But in treating every small business as a potential criminal enterprise, the government would deny small business owners the presumption of innocence and strip away their privacy.
Under the Corporate Transparency Act, businesses with 20 or fewer employees would have to submit detailed personal information on everyone with an ownership stake in the firm. This isn’t a one-time thing, but an ongoing requirement with frequent deadlines.
This is the definition of over-regulation. Such paperwork would be a potentially costly and time-consuming annual chore to add to the list small businesses are already dealing with. Compiling the names of a business’s owners and personal information about them can be complicated if ownership is shared within a family, or among a couple of business partners, or if there are changes as a business is bought and sold over time.
This law would create a hoop that small businesses shouldn’t have to jump through. If they fall short, it will be disastrous. Failing to submit this information on a frequent basis would result in a costly fine and potential jail time — up to $10,000, three years in prison, or both.
But the compliance burden is only half the story. Giving the federal government access to this information would also make it accessible to any local, state, or federal authorities who want it — or even foreign governments that partner with the U.S. This sensitive information would also be at the mercy of hackers, considering how often government databases are compromised.
Scrutiny like this shouldn’t be necessary. The federal government already has the means to investigate businesses it suspects of criminal involvement, as does St. Paul. The United States isn’t a police state, and investigations here are supposed to happen on a case by case basis. If law enforcement officials want the information this bill demands, they can get it — without forcing every Minnesota small business to cut their way through more red tape.
Being asked to sacrifice our time, resources, and privacy like this simply isn’t the American way. No wonder over 80 percent of the small businesses that form my organization, the National Federation of Independent Businesses, agree that this bill is bad for business.
Minnesota’s small businesses are run by dedicated, hard-working, honest people. Washington politicians should know better than to treat them like criminals. For Minnesota’s lawmakers, a vote against the Corporate Transparency Act is a vote in favor of small business.
