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.
Sign up for Kiplinger’s Free E-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.
Get Kiplinger Today newsletter — free
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.
-
Hotels That Give You the Best Value for Your Money, According to Guests
New research reveals the best hotels in the U.S. for value for money according to hotel guests — and why they’re demanding more from their stay.
By Charlotte Gorbold Published
-
Want to Earn $1 Million More Over Your Lifetime? Do This
It's simple: Go to college or a trade school. It's an investment that will pay huge dividends for the rest of your life. And the benefits go far beyond money.
By Brian Evans, CPA, PFS Published
-
Car Prices Are Finally Coming Down
The Kiplinger Letter For the first time in years, it may be possible to snag a good deal on a new car.
By David Payne Published
-
Rising Cyber Threat of AI: The Kiplinger Letter
The Kiplinger Letter Security experts warn that generative AI brings new risks with no clear defenses. With AI's rapid adoption, businesses are vulnerable.
By John Miley Published
-
Kiplinger Special: The Long-Term Future of the U.S. Economy
The Kiplinger Letter Kiplinger's report into what it will take the U.S. to maintain a healthy economic growth rate.
By David Payne Published
-
The Fight Against Cancer Enters a New Phase
The Kiplinger Letter Breakthrough treatments hold promise for patients and investors.
By Matthew Housiaux Published
-
After Decades of Promise, the Virtual Reality Era Has Finally Arrived
The Kiplinger Letter VR is a paradigm shift for consumer technology. The tech has a long road ahead, but amazing hardware already puts the huge potential on full display.
By John Miley Published
-
AI to Power the Next Generation of Robots
The Kiplinger Letter There's increasing buzz that the tech behind ChatGPT will make future industrial and humanoid robots far more capable.
By John Miley Published
-
The Robots Are Coming... But Not For a While
The Kiplinger Letter There’s excitement in the tech sector over the potential of humanoid robots, but widespread adoption is likely to be years away.
By John Miley Published
-
Farmers Face Another Tough Year As Costs Continue to Climb: The Kiplinger Letter
The Kiplinger Letter Farm income is expected to decline for a second year, while costs continue to up-end farm profitability.
By Matthew Housiaux Published