CCAGW Urges Opposition to H.R. 2513 | Council For Citizens Against Government Waste

CCAGW Urges Opposition to H.R. 2513

October 22, 2019

U.S. House of Representatives
Washington, D.C. 20515

Dear Representative,

On behalf of the more than one million members and supporters of the Council for Citizens Against Government Waste (CCAGW), I urge you to reject H.R. 2513, the Corporate Transparency Act.

H.R. 2513, introduced by Rep. Carolyn Maloney (D-N.Y.), would require small businesses to report to the Treasury Department personally identifying information on any “beneficial owners” of corporations and limited liability companies for the supposed purpose of preventing terrorism and money laundering. Forcing small businesses to send sensitive information to the government like Social Security numbers, dates of birth, and home addresses raise serious security concerns. H.R. 2513 lacks safeguards to ensure the safety and confidentiality of small business owners, and it increases cyber security risks such as data breaches and identity theft.

Traditionally, “beneficial owner” refers to anyone who controls 25 percent or more of a company’s shares or voting rights. Unfortunately, H.R. 2513 does not include a definition for this term, which prevents stakeholders and policymakers from understanding the full effects the new law could have on the business community. With such opaque language, the Treasury Department would be given rulemaking authority that could potentially radically widen the scope of criminal liability for small businesses as well as exponentially expand the paperwork requirements of small businesses to comply with the mandates of this bill. In other words, legitimate small business owners will be swamped with unnecessary paperwork while criminals will be figuring out how to avoid the new requirements.

Curiously, this bill only targets small businesses with 20 or fewer employees and $5 million or less in gross sales or receipts. According to the National Federation of Independent Business, H.R. 2513 would add an additional 131.7 million hours of paperwork burdens over the first 10 years at a cost of $5.7 billion. Small businesses are already more likely to be struggling to survive compared to their larger competitors.

The Congressional Budget Office estimates the bill would cost taxpayers $132 million over five years.

Small business owners and taxpayers cannot afford the Corporate Transparency Act. I encourage you to reject this bill. All votes on H.R. 2513 will be among those considered in CCAGW’s 2019 Congressional Ratings.

Sincerely,

Tom Schatz
President, CCAGW

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