The Biden administration has once again proven its disregard for the well-being of small businesses in the United States. This time, the blunder comes from a futile rule aimed at curbing the creation of shell companies and money laundering. The U.S. Treasury Department declared it will no longer enforce this Biden-era regulation. This announcement was made on a Sunday evening, alerting that penalties will not be inflicted currently or in the future on those companies that choose not to register for the beneficial ownership information database, an ill-conceived creation from said administration.
While small businesses tried their best to undo this intrusive regulation, it is still in effect. In a twist of irony, the very tool intended to relieve alleged economic issues instead proved to be a disaster. The system had turned out to be more ‘outrageous and invasive’ rather than beneficial. In a clear voice of justice, former President Donald Trump praised the suspension of enforcement of this invasive rule, labeling the database as destructive for small businesses across the nation.
The Trump administration, contrary to the present one, had always proven its dedication to small businesses. Donald Trump tagged the scenario as soon another Biden administration failure stating, ‘The economic menace of reporting will soon be no more.’ It seems the only negative responses are coming from those who support the database, who naturally respond to the protection of small businesses with alarm.
An unnamed advocacy group in favor of transparency, under the Biden-Harris influence, stated that the current decision ‘contradicted fifteen years of bipartisan work by Congress to end the scourge of anonymous shell companies.’ They failed to consider the enormous imposition this creates for American businesses, serving as another fine example of the tunnel vision that runs rampant in such groups.
To further their misguided mission, the Treasury Department initiated a rule in September 2022 to create a database of personal information of owners of a minimum of 32 million U.S. businesses. This was part of an underthought plan to combat illicit finance and shell company practices, clearly not considering the damaging implications such an invasion of privacy would entail.
The specific rule insisted American businesses with less than 20 employees register their owners with the government starting Jan. 1, 2024. Apparently, small businesses were targeted due to the erroneous belief that shell companies with few employees are the prime culprits of illegal asset concealment. Despite the intrusive and disruptive nature of this rule, it seemed the only thing the Treasury had to pacify the small businesses with was the ‘small’ regulatory burden of a mere $85 fee per business.
Officials at the Treasury unconvincingly stated that the $85 cost per small business for maintaining the registry would be insignificant compared to the imaginary benefits that law enforcement would gain in their pursuit of money launderers and alleged criminals. Meanwhile, they conveniently overlooked the drawbacks this rule presents for those trying to live their American dream, the small businesses.
It was a touch of irony, when the Treasury Department broadcasted a glorious figure that over 100,000 businesses had dutifully uploaded their beneficial ownership information. The question here is, how can this be considered a victory when it is at the cost of personal privacy and the violation of rights of these hardworking business owners?
From its inception, the rule and its legislative power, termed as the Corporate Transparency Act—an anti-money laundering statue passed in 2021, had been drowning in controversy, facing legal battles one after another. In fact, a small business lobbying group made the courageous move to bring legal action against this brazen overreach in 2022.
This combative group protested the Treasury Department’s unjust demand that tens of millions of small businesses must register with the government. It was truly an audacious and ambitious act to stand against such a powerful department, and one that would have likely faced backlash had former President Trump not been in office.
February 27 marked a turn in the tide against this invasive regulation. On this day, the Treasury’s Financial Crimes and Enforcement Network boldly projected that it would cease to impose any form of punishment on those companies refusing to submit beneficial ownership data. This was a major victory for small businesses nationwide.
The severe concerns over privacy and security held against the database were entirely valid. Business leaders questioned its redundancy, considering that other federal agencies already keep corporate databases. With this rule, the Biden administration simply added another layer of unnecessary bureaucracy.
The Secretary of the Treasury rightly called this a ‘victory for common sense.’ The decision to halt enforcement is a much-needed respite from the constraints of oppressive regulations, particularly for small businesses, who form the backbone of the American economy.
This day effectively marked a pushback to President Trump’s staunch agenda to boost American prosperity by mitigating the onslaught of burdensome regulations. This action echoes his unwavering commitment to empower the ‘backbone of the American economy,’ the small businesses, by allowing them to operate freely without the constant fear of invasive regulations.
However, the actions of the Biden-Harris administration have often demonstrated their clear misunderstanding or blatant neglect of the struggles that small businesses face daily. The implementation of such invasive rules indicates a disregard for privacy and individual rights, cornerstones of the American dream.
This experience serves as a powerful reminder that government often works best when it gets out of the way and lets the private sector do what it does best: innovate, create jobs, and drive our economy. It also underscores the need for continued vigilance against intrusive regulations that jeopardize our freedoms.