Back to top Jump to featured resources
Article filed under Independent Business

Does the NFIB Really Represent the Interests of Independent Businesses?

| Written by Stacy Mitchell | 1 Comment | Updated on Sep 3, 2009 The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/does-nfib-really-represent-interests-independent-businesses/

Today, in the New York Times small business blog, Robb Mandelbaum examines the National Federation of Independent Businesses (NFIB), a group that, as we have pointed out before, claims to represent independent businesses, but often lobbies for policies that benefit big business at the expense of small.

Mandelbaum reports that the NFIB’s membership has plummeted from 600,000 in 2006 to 350,000 today. The NFIB says that the drop is due to two factors: the organization is making a more honest accounting of who is actually a member and, in the words of the group’s president, “there are not as many Main Street businesses. They have been diminished by the big box stores, and, frankly, the Internet.”

Mandelbaum writes:

It’s hard to say which of these two admissions is more remarkable, but the second is particularly telling because the N.F.I.B. has never made halting the big box expansion — or curbing the many tax policies that local activists say give national retailers an unfair advantage over independent small competitors — one of its battle cries. For instance, the N.F.I.B. has not taken a position on an Internet sales tax, which would level the playing field for stores that pay such taxes locally. “We have both types of businesses, and we’ve gotten a mixed response from our members on the issue,” explained N.F.I.B. spokeswoman Stephanie Cathcart.

Meanwhile, some state N.F.I.B. chapters — which act individually but consult with the national organization — have actually lobbied against other small businesses and so-called “combined reporting” laws. These laws would ban practices that allow national retailers to shelter much of their local income in out-of-state, tax-free subsidiaries. “For an independent business with only one outlet in Maryland or any of the other 20-some states that have this loophole, the upshot is that you end up shouldering a larger tax burden than your biggest competitors,” contended Stacy Mitchell, senior researcher for the Institute for Local Self-Reliance.

In Pennsylvania, the combined reporting requirement had been paired with a broad corporate income tax cut. “Tens of thousands of independent businesses would see their taxes go down,” said Mitchell, “and yet the N.F.I.B. has stood in lockstep with big business interests.” The N.F.I.B.’s Pennsylvania director, Kevin Shivers, however, makes no apologies for opposing combined reporting. “Our members have told us — they’ve been very specific — that we are not about the business of telling government to tax one sector of the economy in favor of another,” he said.

But taxing “one sector of the economy in favor of another” is exactly what states without combined reporting are doing.  These states are imposing a higher tax on the income of independent businesses and families in order to allow big national chains to escape paying state taxes on billions of dollars in profit.  While the NFIB supports this big business tax loophole, Independent Business Alliances have been fighting for a level playing field in many of the states that have this loophole.

 

Tags: / /

About Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance, and directs its Community-Scaled Economy Initiative, which produces research and analysis, and partners with a range of allies to design and implement policies that curb economic consolidation and strengthen community-rooted enterprise.  She is the author of Big-Box Swindle and also produces a popular monthly newsletter, the Hometown Advantage Bulletin.  Connect with her on twitter and catch her TEDx Talk: Why We Can’t Shop Our Way to a Better Economy. More

Contact Stacy   |   View all articles by Stacy Mitchell

  • Anonymous

    Your suspicions and opinion on this organization are accurate. I refused to renew quite a few years ago. I raised questions about why they didn’t support small business issues more aggressively as they had promised. They tried to dance around my pointed questions on several clear issues to no avail. I refused to renew and I have not heard from them since. When I ask other members about their feelings about NFIB I was glad to hear I was not alone in my disappointment. Yes, I rarely see their logo in our city anymore. Kind of like the health insurance companies where the individual policyholder subsidize the employer covered rates. The greed must stop.