Senator Carl Levin (D-Mich) introduced the Incorporation Transparency and Law Enforcement Assistance Act on May 1, 2008. This law (God help us all if it ever becomes law) would force States to determine the “beneficial owners” (the really-truly owners, not fakey-fakey owners) of corporations and LLCs.
Professor Bainbridge has commented on this. He’s way smarter than I’ll ever be. Go there for the reasoned analysis. Come back here for the rant.
CURE IN SEARCH OF A DISEASE
This is a cure in search of a disease.
Senator Levin says this law will protect the United States from U.S. corporations being misused to commit terrorism, money laundering, tax evasion, or other misconduct.
I’d like to know how to do this, please. In my world everything is potentially visible to the government all the time.
If you have a reason to know who owns a corporation, you can get that information. No problems.
What if you’re going to do a business transaction with a corporation? You think maybe there’s a skanky person who “really” owns the corporation.
Simple answer, easily solved without a Nanny State: you ask for the information, you get a personal guarantee from the people behind the corporation, or you don’t do the deal. See, all you need to be is an adult.
Yes, people are going to lie. They will lie you, to the IRS, to the FBI, to your mom. This proposed law won’t change anything. If someone is going to lie about a foreign bank account under threat of $250,000 fine or 5 years in prison (Form TD F 90-22.1), (warning: PDF) do you think Senator Levin’s new law is going to make the difference and scare them straight?
THE REAL BENEFIT OF THIS LAW?
So I guess I don’t see the added benefit to the government for collecting this data in terms of law enforcement. Well, except for the fact that the government slowly beats more data points out of us, randomly, so that some day in a fit of fiscal pointillism the government will see everything and will be able to tax everything.
I don’t think that’s Senator Levin’s motive.
Maybe he believes the bogeyman argument. “Look! Over there! Behind that tree! A terrorist!” I doubt he is that gullible.
So why is it proposed law on the table? Hmmm. Maybe because it is politically expedient during an election cycle?
NEW MINIMUM QUALIFICATION REQUIREMENT FOR SENATORS?
I propose a new entry requirement before someone is permitted to run for the Senate.
Before you run for election, you should have to own and operate a business for two years. If the business succeeds, you get to sleep in a warm, dry place every night and feed your kids. If the business fails, well, I’m so sorry.
The exercise of dealing with employment taxes and making sure that employees get their paychecks on time — that alone — just might be the sanity pill that we need.
Sorry this post isn’t nuanced.