This column by NFIB State Director Annie Spilman originally ran in the Denton Record-Chronicle.
Running a small business is never easy, but Congress is weighing legislation that would make it even harder.
There’s an obscure provision tucked into a routine defense bill, the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, that would make it even harder for Texas businesses to rebound from the COVID-19 shutdown by creating reams of burdensome paperwork while raising serious and troubling concerns over innocent people’s privacy.
Rep. Carolyn Maloney of New York added an amendment — the Corporate Transparency Act of 2019 — into the defense bill named in honor of Congressman Thornberry, who is retiring. The amendment was added over the objections of Thornberry, who previously voted against this legislation and did not want unrelated provisions to slow up an otherwise bipartisan defense bill.
The Corporate Transparency Act of 2019 is a generic-sounding but misleading name to a problematic piece of legislation. It would require most employers with 20 or fewer workers to collect information about everyone who owns a stake in the business and hand it over to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).
If they don’t provide completed and updated paperwork, they could be fined $10,000 and sentenced to three years in prison.
Supporters of the legislation say it’s needed to help the government catch bad guys. They say criminals sometimes use small businesses to hide their identities and launder money. Supporters say requiring employers to file reports on the owners would make it easier to investigate companies suspected of wrongdoing.
The National Federation of Independent Business, the nation’s leading small business advocacy organization, says that’s bunk.
We believe the Corporate Transparency Act of 2019 presents a real economic threat to millions of small businesses here in Texas and across the country.
Small businesses aren’t the same as big corporations. They don’t have teams of lawyers, compliance officers and accountants to fill out reams of government documents and keep up with the latest government mandates.
At most small businesses, the person who fills out and files the paperwork is often the owner — the same person who unloads the truck, empties the trash and locks up at night.
Besides, if drug dealers, money launderers, and other criminals are trying to hide behind a legitimate business, they’re probably not going to put their real names on a form they send to Washington.
When we surveyed our Texas members this spring, they ranked federal paperwork as the 15th out of 75 common problems they face as employers. If this overreaching legislation passes, paperwork will be an even bigger problem and make it even harder for employers to run their small businesses.
NFIB members also are concerned about the potential for a massive breach of privacy.
This legislation would grant broad access to personal information that could be used by law enforcement for just about any reason — and without a court order. And, of course, there’s a chance the government would misuse the data or that hackers would steal it.
The Corporate Transparency Act of 2019 presents a real threat to more than 5 million small businesses in America. That’s why NFIB is asking members of Congress to exclude this non-germane provision from Congressman Thornberry’s defense spending bill.
This provision not only would burden small-business owners with a significant regulatory cost and severe penalties at a time when they are trying to survive but also put their personal and sometimes confidential information at serious risk by creating a database searchable without a judicial subpoena or warrant.
Texas needs Congress to pass legislation that helps small businesses grow and create jobs, not get in their way.