June 21, 2024 – Consumer Choice Center

Banning the display of vape products may impact retailers and lead to boom in the industry’s black market, experts warn

KUALA LUMPUR, June 21 — With the Health Ministry set to fully enforce the Control of Smoking Products for Public Health 2024 (Act 852) this month, experts said drastic moves like banning the display of vape products at shop counters can lead to creating a whole new market for non-compliant and illegal products.

Pankaj Kumar, managing director of Datametrics Research and Information Centre (DARE), said such a ban can undermine both consumer safety and government revenue.

“The vape industry, which is currently valued at RM3.48 billion, contributes to the economy by creating jobs and facilitates growth of the retail sector. Drastic measures can stifle this growth and lead to job losses,” he said at the Control of Smoking Products for Public Health Act 2024 (Act 852) Roundtable here.

“Implementing and enforcing drastic measures can also be costly for the retailers. Hefty costs and investments would need to be made to adjust to the ban of display of vape products and these resources could be better spent on facilitating growth of businesses especially in current economic situations.

Read the full text here

How Agriculture Tipped the Scale on Europe’s Biggest Election

Many of the 370 million European Union citizens eligible to vote headed to the polls recently to elect a European Parliament. The EU’s legislative body does everything from amending legislation to appointing an executive arm in Brussels, with all 720 seats up for re-election.

While Germany, France and Italy represent the largest populations, allegiances in the Parliament are formed on ideological grounds, less so national affiliation. Political parties from all 27 member states form political groups, or caucuses, that help them pass legislation in line with their manifestos.

The election shows a shift in the tide of Europe’s priorities. In 2019, the focus was mainly on environmental protection and social justice. Since then, voters have increasingly expressed support for parties echoing industrial development and ease in regulation. Overall, center-right and right-wing nationalist movements have made gains. In France and the Netherlands, those movements have been stronger than ever, in a rebuke to the policies pursued by the EU in the last five years.

Not one election can be pinpointed in its results to one specific event. Since the last election, Europe has gone through the effects of COVID-19, the continuing inflation, energy shortages and war in Ukraine. Issues of migration remain high on the agenda. That said, the farmer protests of the last two years have eroded trust in the EU’s institutions.

Farmers have protested environmental regulations in Belgium, the Netherlands, France and Germany. They expressed frustration that even though their businesses are essential for consumer welfare, the regulatory state has made it increasingly impossible. Other environmentalist policies — such as a planned ban on the internal combustion engine, eco-tax schemes, or the ban on plastic single-use kitchen items — also touched consumers. The farmer protests made the issue more palpable for voters.

While farming has changed over time, it has always had a special bond with consumers. Government bureaucracies, by contrast, always seemed detached, whether it was keeping farmers poor under the feudal system up until the modern versions of farming in which every niche is over-regulated and calculated to fit a political trend. Since 2019 in Europe, agriculture has been blamed for the continent’s failure to reduce its greenhouse gas emissions.

Ironically, the suggested policies wouldn’t have done much to improve the environmental sustainability of farming; instead, they have bankrupted the sector. For instance, a since-dropped proposal to reduce pesticide usage by 50 percent would have made it even more difficult for European farmers to switch to no-till farming, which reduces soil erosion and prevents more carbon dioxide from being released into the atmosphere. EU institutions had become captured by anti-pesticide activists ideologically opposed to these products at the expense of scientific reasoning, consumer welfare and farmer livelihoods.

Voters in Europe have sent a clear message to policymakers: There are reasonable ways to protect and improve the environment we live in, but large-scale interventions that aren’t means-tested will hurt the people who feed us. This is also why those new lawmakers will be incentivized to untangle many of the bureaucratic webs that the EU has spun over the previous mandate.

The tide has turned on radical environmentalism in Europe, and we’re all better off for it.

Originally published here

Pembatasan Pembelian Barang dari Luar Negeri dan Terbatasnya Pilihan Konsumen

Perkembangan teknologi informasi yang semakin pesat merupakan hal yang sudah mengubah hidup miliaran orang di seluruh dunia, termasuk juga di Indonesia. Saat ini, hampir seluruh kegiatan dan keseharian yang dilakukan oleh masyarakat bisa dilakukan melalui internet secara daring, seperti memesan transportasi umum, mencari pekerjaan, menikmati tayangan film, hingga kegiatan jual beli barang yang sangat beragam melalui toko daring.

Adanya toko daring tentu merupakan hal yang sangat menguntungkan bagi jutaan konsumen di Indonesia. Melalui toko daring, konsumen memiliki pilihan barang yang sangat banyak dan beragam dari seluruh dunia, yang bisa didapatkan dengan cepat dan ringkas tanpa harus membuang-buang waktu pergi ke toko seperti di tahun-tahun sebelumnya. Tidak mengherankan, jumlah nilai transaksi di toko daring mencapai angka yang fantastis, hingga lebih dari 500 triliun rupiah pada tahun 2023 lalu (kemendag.go.id, 5/1/2024).

Semakin luasnya praktik jual beli online ini, meskipun membawa manfaat yang sangat luas kepada konsumen, hal ini juga memunculkan tantangan baru. Adanya kesempatan konsumen untuk membeli barang dari seluruh dunia membuat banyak pedagang lokal dalam hal ini juga harus bersaing dengan pedangang dari negara lain.

Untuk mengatasi hal tersebut, beberapa waktu lalu misalnya, Pemerintah Indonesia melalui Kementerian Perdagangan mengeluarkan aturan yang membatasi kebebasan konsumen di Indonesia untuk membeli barang dari luar negeri. Batasan tersebut dalam bentuk adanya nominal minimum yang diperbolehkan untuk pembelian tersebut, yakni sebesar USD 100 (cnbcindonesia.con, 27/09/2023).

Adanya aturan tersebut tentu sangat membatasi kebebasan konsumen Indonesia. Tidak jarang, ada barang tertentu yang tidak dijual di Indonesia, dan sangat dibutuhkan oleh seseorang, dan harganya tidak terlalu tinggi. Dengan demikian, melalui aturan tersebut, cara agar seseorang bisa mendapatkan barang tersebut adalah apabila ia membeli dalam jumlah besar sampai lebih dari USD 100.

Pihak yang paling dirugikan dari kebijakan ini tentu adalah konsumen menengah ke bawah. Kebebasan mereka untuk memilih produk menjadi sangat terbatas, dan bukan tdiak mungkin mereka akan dipaksa untuk membeli barang tertentu dengan kualitas yang berbeda dengan yang mereka inginkan dari dalam negeri, karena mereka tidak memiliki sumber daya bila harus membeli barang yang serupa dengan kualitas yang lebih baik dari luar negeri dalam jumlah yang banyak.

Tidak mengherankan, adanya aturan tersebut menimbulkan banyak kritik dari masyarakat, khususnya para pengguna dan konsumen toko daring. Tidak sedikit dari keluhan tersebut ditumpahkan melalui media sosial. Barang-barang yang dibeli tersebut akhirnya ditahan di bea cukai ketika masuk ke Indonesia (kumparan.com, 14/01/2024).

Adanya batasan minimum jumlah tersebut juga sangat mempengaruhi operasi berbagai toko daring di Indonesia. Shopee misalnya, yang merupakan salah satu toko daring terbesar di Indonesia, sejak aturan ini diberalakukan, beberapa waktu lalu akhirnya menutup halaman untuk pengguna dapat membeli barang dari luar negeri. Hal ini tentu sangat menyulitkan bagi konsumen (republika.co.id, 05/9/2023).

Selain itu, adanya aturan ini juga tidak akan membantu para pemilik usaha mikro, kecil, dan menengah (UMKM) di Indonesia. Tidak sedikit misalnya, para pemilik UMKM yang memiliki model bisnis pre-order atau PO dari luar negeri, di mana mereka menyediakan beragam barang yang tidak bisa didapatkan di Indonesia. Adanya aturan tersebut tentu akan mematikan para pemilik usaha UMKM yang memiliki model bisnis tersebut.

Kebijakan pembatasan jumlah minimum pembelian barang dari luar negeri sendiri tentunya merupakan salah satu bentuk kebijakan proteksionisme. Sebagaimana dengan bentuk kebijakan proteksionisme lainnya, hal ini tentu berpotensi bisa menimbulkan berbagai kerugian, salah satunya misalnya yang paling nyata adalah terbentuknya kartel bisnis tertentu yang dapat mengatur harga dan tentunya sangat merugikan konsumen.

Adanya pembatasan minimum ini tentunya akan menguntungkan segelintir pemilik usaha tertentu karena pilihan konsumen akan semakin terbatas. Para konsumen tidak lagi memiliki pilihan untuk mendapatkan barang dari luar negeri dengan kualitas yang lebih baik dan harga yang paling murah. Belum lagi, adanya kebijakan ini juga berpotensi akan ditanggapi dengan kebijakan proteksionisme tandingan dari negara lain. Bila ada negara lain yang menerapkan kebijakan serupa untuk barang-barang ekspor dari Indonesia, tentu kerugian paling besar akan dirasakan oleh para pelaku usaha di Indonesia yang mengekspor barang-barang dagangan mereka.

Sebagai penutup, setiap aturan tentu akan ada unintended consequences yang muncul dari aturan tersebut. Mungkin niat dari pembuat kebijakan pembatasan ini adalah baik, tetapi niat baik saja tidak cukup agar suatu kebijakan dapat membawa manfaat besar bagi publik. Jangan sampai, adanya kebijakan yang diawali dari niat baik tersebut ujung-ujungnya justru menjadi kontraprodukti dan justru semakin mempersulit masyarakat untuk mengambil pilihan.

Originally published here

Sunak’s pledges sacrifices consumer freedoms

Mike Salem, The UK Country Associate for the leading international consumer group, the Consumer Choice Center (CCC), reacted to the launch of the Conservative Party manifesto earlier on Tuesday.

In a statement, Salem expressed support for proposed tax cuts, building on brownfields to alleviate the housing shortage, using AI and integrating technology in the NHS, as well as plans to encourage nuclear energy.

However, despite these pledges, Salem raised concerns about the feasibility of these cuts, which would halve £178 billion of government revenue, and the control over lifestyle options by reintroducing the Tobacco and Vapes Bill. He further raised concerns about the credibility of these promises in light of the government’s priorities over the last two years.

Read the full text here

North Carolinians deserve clarity on the legal status of poolsharing

Copying homework is as endemic to tech innovation as it is to regulatory policy. A new video application will take off in Silicon Valley, and before you know it, every major social media company has its own spin on the concept. There exists now an “Airbnb but for [insert private property]” for everything from backyards to vehicles. Regulators scramble to keep up with the disruption one good idea can cause, so localities survey the country for agencies who pulled the trigger early on regulatory intervention. Both scenarios are perfectly captured by the rise of Swimply in North Carolina, “Like Airbnb but for backyard pools,” and local government’s attempts to squash what consumers call “pool sharing.”

On May 20, Mecklenburg County blasted out a warning to residents of the Charlotte-metro area, saying, “RESIDENTIAL POOLS FOR SHORT TERM RENTALS FORBIDDEN IN MECKLENBURG COUNTY.” The release specifies that “residents who rent out their private pools to third parties on a short-term basis” are running afoul of NC General Statute 130A-281, and homeowners in violation could face legal action.

A homeowner with a backyard pool they’d like to share by the hour with locals might be surprised by the language of Statute 130A-281, which reads, “No public swimming pool may be opened for use unless the owner or operator has obtained an operation permit.”

Mecklenburg is making the argument that a private oasis in your backyard being rented to someone on an app for a fee is now regulated under state law as a public swimming pool. Yes, a public pool like those with swimmers packed shoulder to shoulder, lifeguards giving lessons, and hosting swim meets for competitive teams.

A public pool must follow all manner of regulations, including having a landline available to its swimmers for dialing 911 in an emergency. They must log daily tests of water pH levels, temperatures, and disinfectant levels. Backyard pools only have to meet the installation and structural requirements to be in use, and if you’ve ever had a friend with a pool, some are immaculate and others are nasty.

Mecklenburg County’s Public Health Environmental Health Division copied the homework of Orange County and Buncombe County, which began sending threatening letters to homeowners in 2023 who were using the Swimply app to share their pool. Swimply responded with legal pushback from the firm Squire Patton Boggs (SPB), asserting that the departments were overstepping their authority in determining the legal status of pools rented on third-party apps.

Regulatory agencies like to play copycat and coordinate with their colleagues in other states. They also “push where there is mush,” meaning any vagueness in state law is taken as an invitation to regulate. North Carolina’s 1999 Vacation Rental Act (VRA) is the existing law of the land for short-term rentals. Due to its age, the VRA has been at the center of one local fight after another, as sharing apps like Airbnb, VRBO, and FlipKey have come on the scene. Battles have raged from Wilmington to Asheville, and just as the state legislature began to get familiar with the concept of homesharing, new forms of peer-to-peer commerce arose like pool sharing (Swimply) and the peer-to-peer exchange of backyards for dogs to play in (Sniffspot).

North Carolina’s Department of Health and Human Services (DHHS) has not been amused by the fun people are having in renting backyard pools for birthday parties and social events. The agency released a memo in 2021 offering “guidance” to local health departments, which amounts to a strongly worded suggestion that can be enforced with impunity in the absence of clarification of law by the state legislature.

Carolina Journal published an article recently by the John Locke Foundation’s Jon Sanders, who rightly called this a form of “regulatory dark matter,” where lone bureaucrats essential rule by blog post. A simple publication on an agency website, a press release, or any documentation bearing an official state watermark is enough for most to treat it as law when it is not.

North Carolina’s copied homework is just one of many instances of regulatory dark matter that have popped up since Wisconsin’s Department of Health Services took action against pool sharing in 2021. Since then, Nevada, New York, South Carolina, Oregon, and Minnesota have tried their hand at eliminating the freedom to swim in a privately owned pool for a reasonable hourly rate.

In many cases, the state agencies know that a backyard Swimply pool does not meet the legal standard for a public pool. Their solution is to overregulate and spook homeowners out of listing their property on the app. Minnesota threatened hosts with fines up to $10,000. The risk now outweighs the potential reward for supplemental income.

Local officials frame their crackdowns as matters of safety and protecting the welfare of children, but they notably exempt backyard pools from their concern if the entire home is being rented on an app. There are hundreds of Airbnb properties throughout Mecklenburg County boasting pools among their amenities. Airbnb has fought hard for every inch of protection under the law in North Carolina, and good for them, but the door is being kicked shut on new concepts built on the gains of homesharing.

The trend amounts to an equal protection issue for new entrants to the sharing economy, such as Swimply. NC DHHS exempts home rentals from their thinking on pool “safety” in no small part due to the coastal tourism industry where large rental properties boast private pools.

If you’ve ever been to eastern North Carolina, these McMansions with pools are a destination for booze-fueled late-night parties and wedding receptions, precisely the kind of activity you’d be most concerned about when it comes to drownings and general safety issues. But a homeowner in Charlotte or Hillsborough hosting a family of three for an innocent two hours of swimming is treated as anarchy.

North Carolina’s state legislature must take action this year and clarify the state law’s scope of coverage for short-term rentals. It’s going to be a hot summer and thousands of families will be looking online for ways to cool off and entertain both kids and guests by the poolside.

Homeowners should have the opportunity to make use of their private property to make ends meet. Consumers should have more choices for spots where they can swim. But above all else, the law should be clear to all. If consumer choice and property rights are not to be upheld in the state, the least the legislature can do is settle this issue for all the North Carolinians being intimidated and harassed by regulators with too much time on their hands.

Originally published here

Juul Ban Reversal Welcomed

The potential return of Juul to U.S. store shelves would represent a win for consumers and tobacco harm reduction, according to the Consumer Choice Center (CCC).

On June 6, the U.S. Food and Drug Administration rescinded its 2022 marketing denial order. While the move is neither an authorization nor a denial, it places the company’s premarket tobacco product application back into scientific review, meaning it could potentially be authorized at some point.

“This is a step in the right direction for consumers who want more nicotine alternatives to combustible tobacco,” said CCC U.S. Policy Analyst Elizabeth Hicks.

The FDA said in its June 6 statement that it had “conducted additional substantive review of the applications in a number of disciplines, including toxicology, engineering, social science and clinical pharmacology” and that their change of course is based on a “review of information provided by the applicant” plus new case law based on court decisions involving MDOs for e-cigarette products.

Read the full text here

Elizabeth Warren Ditches Consumer Welfare In Support of Big Banks

Sen. Elizabeth Warren (D-Mass.) loves to cast herself as the ultimate public defender of consumers and the arch-nemesis of bankers on Wall Street.

However, with her recent record opposing popular mergers and shutting down regulatory reform for Bitcoin and its crypto-offspring, Warren has sided more with the major banks rather than new players that stand to empower consumers.

In the last month, Warren has used her perch in the Senate to oppose the repeal of the Securities and Exchange Commission’s Staff Accounting Bulletin 121, which would have allowed financial institutions to more safely hold cryptocurrencies. She’s also moved to shut down Senate debate on the House-passed Financial Innovation and Technology for the 21st Century Act, the first substantial federal framework for digital assets.

In the same vein, Warren opposed the prospective merger between Discover and Capital One Bank, the first serious joint venture that could have rivaled the payment networks of Visa, Mastercard, and American Express.

Warren, along with left-leaning groups like Americans for Financial Reform and the American Economic Liberties Project, claims the acquisition will stifle competition and harm consumers by creating the largest U.S. credit card issuer in terms of assets.

Their coalition argues Capital One would hike merchant fees and make its users pay higher for using their cards, saddling millions of customers with high-interest debt they could never hope to pay off.

This critique misses a crucial point: the real threat to competition comes from the entrenched banks that already have dominant market positions, not from the emergence of new competitors that may offer better products.

Many of the large banks with a power base in Washington, D.C. have flexed their regulatory muscle to stop the merger from happening, for the precise reason that it would lead to more competition in a highly regulated space.

In a recent American Banker article, Intrepid Ventures’ Eric Grover made this very case, “The other goliath banks don’t want the deal to go through because they’ll face a more formidable competitor.” Combining the customer base of Capital One banking and credit customers with a dedicated payment network in Discover would unlock some needed competition for payment rails using either debit or credit cards.

In opposing the deal, Warren is purporting to save consumers from yet another “too-big-to-fail” bank, but rather than protecting the little guy, she’s depriving each and every one of us from accessing additional financial service options.

Warren’s position protects big banks from having to innovate and compete and allows them to keep costs high and choices limited for consumers. This isn’t a minor oversight. It raises serious questions about Warren’s true motivations.

In pursuing a centralized, highly regulated financial services sector, Elizabeth Warren has become a warrior for the incumbents rather than the upstarts. She’s chosen to fight for the boardrooms rather than consumers and their wallets.

Despite Warren’s best efforts, the financial landscape is evolving, with digital wallets and flexible credential technologies from companies like Visa and Curve, which offer consumers unprecedented flexibility at checkout. They’re also working to protect consumer privacy by issuing virtual numbers to avoid identity theft.

FinTech services have slowly gained adoption across the country, providing new ways to consumers to fund their lives and save for their families.

A merger could harness these technologies and provide merchants with more routing options that lead to potentially lower costs for both the provider and the consumer. More choices at the point of sale mean greater competition among the card networks for your loyalty.

That means an arms race to improve rewards programs.

Despite this potential upside, Warren insists the acquisition can only harm consumers.

The Federal Reserve and the Office of the Comptroller of the Currency (OCC) have extended the public comment period for this acquisition, ensuring a more thorough review. Hopefully, this will allow consumers time to have their say in voicing the need for more competition in the banking sector.

Competition could take the form of innovation in the adoption of cryptocurrencies, a key demand of millennials and minorities who are more likely to hold these assets. It’s an undeniable next frontier for FinTech and banking services which give consumers more control of their money.

Elizabeth Warren’s opposition to the Capital One-Discover acquisition, framed as consumer protection, is actually a defense of the entrenched Wall Street giants who oppose it.

It’s past time to hold Warren and her cadre of manipulators accountable. Allowing this acquisition to proceed could foster a more competitive and innovative financial sector that benefits all consumers. That’s a goal we should all be able to agree on.

Originally published here

In Pursuit Of “Corporate Transparency,” A Mass Doxxing Of LLCs Puts Financial Freedom And Privacy At Risk

Beginning this year, any individual with shares in an American domiciled company will be required to submit identifying information to FinCEN. This record collection from the US Treasury Department’s Financial Crimes Enforcement Network is intended to “curb illicit finance” by requiring a national database of every “beneficial owner” of an LLC.

As stipulated by the Corporate Transparency Act, passed by Congress in 2019 and later snuck into the National Defense Authorization Act in 2020, the US Treasury will gather this information to “prevent wrongdoers from exploiting United States corporations and limited liability companies for criminal gain, to assist law enforcement in detecting, preventing, and punishing terrorism, money laundering, and other misconduct involving United States corporations and limited liability companies“.

Though President Trump vetoed the NDAA in January 2021, the Democratic-led Congress overrode his veto and ushered the CTA into law. It came into force this year.

To the uninitiated, the CTA may not seem like a big deal. Who doesn’t want to reveal all the fat cats “dodging” their taxes from Uncle Sam using tax shelters? Or those taking advantage of US corporate structures to hide money from offshore jurisdictions?

But in the name of rooting out money laundering and proceeds of crime as they make their way through the US economy, every part-owner of a pet salon, car wash, or handyman service will be required to divulge their identity and ownership percentage to FinCEN – the US’ financial intelligence agency established to combat money laundering and terrorist financing. Guilty before proven innocent.

CTA: Hitting The Little Guys

This mass doxxing of LLCs means fewer Americans will be able to safely and privately secure their assets. Those with billions or millions of dollars will have the sanctity of well-funded lawyers and various schemes to protect their wealth. The average person will not.

Single and multi-member LLCs, legal partnerships, sole proprietorships, and trusts have evolved to protect ownership and assets for countless families, individuals, and companies. Many people chose to place ownership of their home, car, or even fishing boats under limited liability companies. It’s not about hiding from the government or tax authorities. Rather, it’s about selectively revealing what can be derived from public information about our assets.

That information will be more readily available to all facets of American governmental power – much beyond the IRS – and that also makes it a substantial central repository for hackers, leakers, and abusive government officials who could weaponize it at any moment. The daily torrent of leaks and hacks with personal and financial information of millions proves this.

The CTA Treats Ordinary People Like Criminals

The “beneficial owners” of any company or LLC are ultimately those who profit from the financial activities of said company. When a corporation owns shares in an LLC, and so on, the identity of the actual individuals may not be publicly known. On the websites of state Secretaries of State and Department of Corporations, the trail for the actual individuals who own a company may prove elusive.

A dynamic industry of registered agents in select states provide a protective layer of legal structure to families, entrepreneurs, and individuals. To law enforcement and banking authorities, this information is easily attainable. No one can open a bank account anonymously in the US.

If there is legitimate probable cause that a company or entity is linked to crime, law enforcement already has the means and power available to subpoena banks, registered agents, and legal firms. State agencies easily divulge this information when asked. Thus far, this system has balanced Americans’ financial and commercial privacy against legitimate police investigations by requiring lawfully obtained warrants and judicial orders.

Even though states like Delaware, New Mexico, Nevada, or Wyoming may have privacy-preserving LLC registration processes, the records of the actual beneficial owners can always be obtained by getting court orders to unmask them. Whether it’s the IRS, the FBI, or even a local sheriff’s office, this is how the rule of law works in the US.

But with the Corporate Transparency Act in full force, FinCEN will now require that the all beneficial owners be completely doxxed from the outset. And this is the most troubling aspect. Legal firms that help citizens register companies, banks that serve them accounts, and even state authorities that help with licensing will be required to check whether the beneficial owner information has been reported to FinCEN.

The unique 50-state corporate registration process that has generated so much wealth and prosperity in the United States is effectively being nationalized and centralized before our very eyes. Like many arduous KYC/AML processes in place at banks and cryptocurrency exchanges, ordinary people are now being treated like criminals in pursuit of the tiny percentage that may be linked to wrongdoing.

How LLCs Protect Our Privacy

Ordinary middle-class Americans have used the privacy-preserving features of LLCs to protect their assets, investments, and property for years. If you wanted a modicum of privacy for your home or investments, whether from stalkers, tabloid press, or spiteful ex-partners, LLCs have always been ideal. These structures have been vital in the privacy community, and for good reason.

LLCs are organized for the purpose of offering goods and services as a business, and also to shield the individuals from liability concerns in case anything goes wrong. It allows people to set up entities in order to participate in commerce, separating it from their personal assets. It’s the bedrock of American innovation, a necessary feature of free enterprise, and a stalwart tradition rooted in the rule of law.

The beneficial owners of these companies have always had to report income to the IRS and reveal their identity in order to apply for bank accounts. But this new reporting mechanism is an additional step that will open up that information for all to view, as well as introduce new opportunities for your rights to be denied or abridged by other government agencies and companies they regulate.

What’s more, as we have seen from too many data breaches and hacks, it means that the financial information of hundreds of millions of Americans will be that much easier to obtain and exploit.

Fairness, Transparency, And Distractions

The CTA was quietly pursued by Congress under the leadership of Speaker of the House Nancy Pelosi. At the time, the rhetoric about fairness in tax and regulatory policy was a major talking point.

The actions and various media scandals of then President Trump distracted most journalists and analysts from understanding the implications of the CTA and other complex policies that were ushered into omnibus bill packages. The House version of the CTA easily passed in a vote in the fall of 2019, with only a handful of Republicans joining an almost unanimous Democratic caucus.

The Senate version of the bill was introduced by Sen. Ron Wyden, a Democrat of Oregon, normally one of the biggest Democratic champions for privacy, tech innovation, and keeping the government out of citizens’ business. For this bill, though, the party line took precedent.

Despite efforts to neuter the bill by Ohio Congressman Warren Davidson, it was packaged together by Congress and inserted into the main military funding bill, the NDAA, in late 2020, which Trump vetoed. The Democrats’ overriding of the veto, in the final month of Trump’s presidency, cast the CTA into law. Now we’re living with the consequences.

Ironically, while lobbied as an increase in transparency for corporate entities, parts of the Corporate Transparency Act read precisely as if they were ripped from the recommendations of FATF: an unaccountable, opaque intergovernmental organization setup to combat international money laundering.

FATF’s requirement is simple: every known individual with an interest in a business venture should have that information known not only to their state tax and business regulators, but also to the federal government.

Chasing The One Percent: It’s All About The Money

In a recent court filing, House Democrats on the Financial Services Committee articulated their defense of the CTA, claiming that obtaining all beneficial owner information is “crucial to combat money laundering and its attendant national security and law enforcement risks”.

But what if it only comes down to money?

Looking at the recent numbers, the US federal government is $35 trillion in debt. The debt to GDP ratio is 135%, meaning the entire productive output of the economy in a single year (roughly $28 trillion) is dwarfed by our outstanding and ever mounting debt. With total tax revenues hovering near $5 trillion per year, this means the US would need only 7 years to pay off the national debt…if it had no other expenses. But that’s fantasyland.

The last time the US federal budget was “balanced,” meaning the government spent less than it took in, was 23 years ago in 2001. Even then, that was mostly due to accounting trickery by removing unfunded liabilities from the formula.

The truth remains that the US government is in dire need of funds, despite having the most productive and rich economy in the world. And if it can’t print its way out of oblivion, it has to raise revenues by chasing tax dollars in every nook and cranny. By unmasking beneficial owners of every company, these regulators hope they will unearth mass riches that have been kept from government coffers. But what will they destroy along the way?

Calling Out Attacks On Financial Privacy

Thankfully, a recent court decision is chipping away at the inevitability of the Corporate Transparency Act. On March 1, 2024, a judge in an Alabama District Court declared the CTA unconstitutional, halting the government from collecting information from the specific parties involved in the case National Small Business United v. U.S. Department of the Treasury.

That case is now on appeal in the Eleventh Circuit, which could nullify the bill in its entirety, or overturn the district judge’s decision. How this case proceeds will be vital to protecting financial freedom and privacy not only for Americans, but any global citizen with a stake in the American economy.

In a amicus brief shared with the court, the Cato Institute, a prominent libertarian think tank, demolished the government’s case for enforcing CTA, arguing that the forced doxxing of beneficial ownerships violates the Fifth Amendment.

The vast majority of Americans are law-abiding and follow tax laws. Further reducing the financial privacy of 350 million people to “chase” the 0.5%-1% is a perilous path, and the court should absolutely heed the warnings by Cato and the litigants. What CTA represents, among other proposals, is a slow-roll attack on financial privacy for ordinary people.

The ratcheting-up of KYCing every financial transaction or relationship – bitcoin or fiat – is part of a larger, more sinister trend. We have to be prepared to call it out wherever it originates.

Originally published here

Day: June 21, 2024

Banning the display of vape products may impact retailers and lead to boom in the industry’s black market, experts warn

How Agriculture Tipped the Scale on Europe’s Biggest Election

Pembatasan Pembelian Barang dari Luar Negeri dan Terbatasnya Pilihan Konsumen

Sunak’s pledges sacrifices consumer freedoms

Juul Ban Reversal Welcomed

Elizabeth Warren Ditches Consumer Welfare In Support of Big Banks

In Pursuit Of “Corporate Transparency,” A Mass Doxxing Of LLCs Puts Financial Freedom And Privacy At Risk

CTA: Hitting The Little Guys

The CTA Treats Ordinary People Like Criminals

How LLCs Protect Our Privacy

Fairness, Transparency, And Distractions

Chasing The One Percent: It’s All About The Money

Calling Out Attacks On Financial Privacy

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