Stop treating small business owners like criminals

A guy who owns a hardware store or a two-truck landscaping outfit now has to file federal paperwork disclosing his personal information to a database, under threat of criminal penalty, because Congress decided anonymous shell companies are a money-laundering problem. Fine, shell companies can be a problem. But the Corporate Transparency Act didn't just aim at the handful of people actually structuring LLCs to hide dirty money. It swept up something like 32 million small businesses into a reporting regime that treats the local dry cleaner the same as a Cayman Islands holding company. That's the part nobody in Washington seemed to think through, or maybe they did and just didn't care.

Warren Davidson's push to kill the law through the NDAA is the right move, and the fact that it takes a defense bill to do it tells you something about how stuck this has become. FinCEN has already had to pause enforcement once because courts kept finding constitutional problems with it. That's usually a sign a law was written badly, not that it just needs better messaging.

The people this actually burdens are the ones with the least capacity to deal with it. A big company has a compliance department. A guy running a small excavation business does not have a compliance department, he has a truck and a backlog of invoices. Threatening him with fines or jail time for missing a filing deadline he didn't know existed is not how you catch money launderers. It's how you make running a small business one more thing that feels impossible in this country.

Repealing it outright, rather than tinkering with thresholds and exemptions again, is the honest answer. Small business owners aren't the suspects here. Treating them like they are was the mistake from the start.