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Minority-Owned Business and the Law

On 3 Jun 2024, The Boston Globe published an article about a group of Black women business owners (the reporters’ and/or editors’ designation, not mine) — along with a variety of advocacy organizations with the word “Black” in their names — who are suing the federal government over new rules that require every business in the country to file paperwork with the Department of the Treasury listing their “beneficial owners.”  The point of the rule, as with nearly all such rules, is nominally to prevent money laundering and/or tax fraud.  And, as with nearly all such rules, piling on “filing” requirements brings with it the potential for over-burdening small business owners (i.e., those who don’t have staff accountants and staff lawyers to keep them straight with such things) both with yet more paperwork and with yet more potential legal exposure.  This particular rule also, of course, adds yet another small brick into the growing edifice of the surveillance state.

That said, as reported in the story, the reason for the lawsuit appeared not to be that the new rule was overly burdensome to businesses generally.  No.  The reason for the lawsuit appeared to be that it was overly burdensome specifically to businesses owned by members of minority groups.  As one of the plaintiffs’ lawyers put it,

People of color, immigrants, non-English speakers, and low-income individuals who own businesses already face significant burdens in creating and running those businesses.  Now the federal government threatens them with fines and prison time.

Or, as another advocate put it,

BECMA’s membership includes hundreds of Black-owned small businesses that could come into the crosshairs of the federal government because this new law…we must challenge a law that would threaten the viability of so many small and diverse firms across the Commonwealth.

After reading the story, I found myself wondering: what does being a “person of color” or an “immigrant” or a “non-English speaker” or a “low-income individual” — or not — have to do with it?  Why must everything be viewed as a construct of race or gender or class?  Is there nothing left in the world of the universal human condition…?

I sent this letter to the Globe to ask that question.  It was not published.

3 June 2024

To the Editor:

I feel compelled to ask: How, exactly, does a requirement to report all “beneficial owners” of businesses to the federal Treasury impact minoritybusiness owners any more than it does business owners generally?

Yes, I can understand that it would discourage immigrants who are here illegally from operating in the open.  I cannot, however, believe that would affect more than a handful of people.  Nor am I fully convinced that would be a bad thing.

And yes, the requirement may be burdensome to all small business owners, across the board; and it may well also be considered a sign of creeping advance from a feared surveillance state.

But, what exactly are the litigants implying when they claim it would be more of a problem for “minority” business owners to “…come into the crosshairs of the Federal government” than it would for any others?

Are they are claiming minority business owners would be targeted for extra scrutiny by bigoted Treasury officials because they are minorities?  Really?  Are we that paranoid in 2024?  I thought the valiant Federal government was supposed to be the avenging angel to right all the racial and gender wrongs perpetrated by unenlightened citizens and the state and local governments that bend to their will.

Or, are they suggesting that minority business owners are more at risk from Federal scrutiny because they are, somehow and in general, less competent and/or less law abiding than others?  To me that sounds rather condescending — and, frankly, racist…


© Copyright 2024, Augustus P. Lowell

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