Corporate Transparency Act Threatens Small Businesses, Privacy Rights

The House today is expected to pass a controversial bill impacting a wide swath of American businesses, as part of the must-pass National Defense Authorization Act. CEI Senior Fellow John Berlau warns that the Corporate Transparency Act will impose significant burdens on small businesses and impinge on individual privacy rights.

“At a time when U.S. small businesses are suffering from lockdown orders and hemorrhaging cash, attaching the so-called Corporate Transparency Act to a must-pass defense bill is the exact opposite of stimulus. While most mandate measures exempt small businesses, this one specifically targets firms that employ 20 or less and exempts all larger businesses. Because a few small firms may be involved in criminal activities, the measure creates vague and burdensome requirements for millions of firms that employ 20 or less to provide detailed information to the federal government. In addition to the economic burden, the measure also infringes on individuals’ privacy rights. Law enforcement can get this information now if it believes a crime may be taking place, but this would give it immediate access to this data even if there is no suspicion of a crime. America’s small entrepreneurs are the key to its prosperity, which ultimately equals national security, so the Corporate Transparency Act should be immediately withdrawn.”