High Court Wallops Small Business
Allowing companies to spend freely on political campaigns favors big firms over small ones.
Small business took a big hit from the Supreme Court’s recent decision on campaign cash. When the justices ruled -- in Citizens United v. Federal Election Commission -- that companies and unions can spend as much as they want, they gave big business, with its far richer coffers, a huge advantage over small firms with no money to spare.
The court’s ruling will further undermine fair market competition between large corporations and independent business owners, says Jeff Milchen, founder of the American Independent Business Alliance, a national nonprofit organization created to support independents.
More big-company pressure is almost a given. While no one expects firms to start spending all their profits backing political candidates, they don’t need to. Imagine the effect if they got together and defeated a critical committee chairman or swing vote. Or imagine a big-box store pressuring zoning officials to back a move that would overwhelm nearby smalls.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
One probable result: Continued lax enforcement of federal contracting rules. Small business advocates have long railed at the Small Business Administration for failing to meet federal procurement goals, which mandate that 23% of the total value of federal prime contracts go to small business. There’s a bill in the hopper on Capitol Hill that would give this mandate more teeth through tougher rules and more transparency, but the court decision may boost opposition.
Also possible: Repeal of a key law -- the Robinson-Patman Act -- that helps keep large firms from using their buying power to negotiate lower prices. Moreover, the ruling could bolster opponents of legislation intended to strengthen the Sherman Antitrust Act.
Federal research money is at stake. There’s already a move afoot in Congress to loosen eligibility rules in the federal Small Business Innovation Research program. Doing so would hurt independent little firms because they’re sure to find themselves losing out to small rivals backed by big venture capitalists. The court ruling enhances the climate for looser rules.
Another potential battleground: Stricter food labeling laws favored by some small organic food products makers but opposed by megacorporations, says Milchen.
For weekly updates on topics to improve your business decisionmaking, click here.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
-
Four Essential Michael Jordan Quotes on Life in RetirementThe GOAT of basketball on how he spends his time and what he misses.
-
Three Critical Tax Changes Could Boost Your Paycheck in 2026Tax Tips The IRS predicts these tax breaks may change take-home pay in 2026. Will you get over $1,000 in tax savings?
-
What Services Are Open During the Government Shutdown?The Kiplinger Letter As the shutdown drags on, many basic federal services will increasingly be affected.
-
The Economy on a Knife's EdgeThe Letter GDP is growing, but employers have all but stopped hiring as they watch how the trade war plays out.
-
Banks Are Sounding the Alarm About StablecoinsThe Kiplinger Letter The banking industry says stablecoins could have a negative impact on lending.
-
Apple Readies for AI Upgrade with New iPhonesThe Kiplinger Letter The tech giant has stumbled when it comes to artificial intelligence, but a new batch of iPhones will help it make headway.
-
Japan Enters a New Era of Risk and ReformThe Kiplinger Letter Japan has entered a pivotal moment in its economic history, undertaking ambitious policy and structural reforms to escape from decades of stagnation.
-
How Consumers Are Tinkering with Cutting-Edge AIThe Kiplinger Letter Companies launching artificial intelligence tools are jostling for consumer attention. Some products are already building a deep connection with users.
-
After Years of Stagnant Growth, Hope Emerges for EU EconomyThe Kiplinger Letter Can a German fiscal push outweigh French political peril?
-
Small Businesses Are Racing to Use AIThe Kiplinger Letter Spurred on by competitive pressures, small businesses are racing to adopt AI. A recent snapshot shows the technology’s day-to-day uses.