What is the National Federation of Independent Business?

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Dan Danner, President and CEO, National Federation of Independent Business, addresses the media at a press conference announcing a new campaign targeting regulations. (William B. Plowman/AP Images for NFIB)

In last night’s presidential debate, Mitt Romney went after President Obama’s tax plan by citing a study from the innocuous-sounding National Federation of Independent Business, or NFIB.

“Your plan is to take the tax rate on successful small businesses from 35 percent to 40 percent. The National Federation of Independent Business has said that will cost 700,000 jobs,” Romney said.

In fact, NFIB isn’t all that innocuous — it’s actually a conservative lobbying organization. The group was the lead plaintiff in the unsuccessful lawsuit that brought the Affordable Care Act to the Supreme Court. NFIB’s entire advertising budget this year went to ads that either supported Republicans or opposed Democrats. The group is partially funded by millions of dollars from conservative groups like Karl Rove’s Crossroads GPS and the Koch brothers’ Donors Trust.

According to Mother Jones,the NFIB was established in 1943 by a former U.S. Chamber of Commerce staff person who thought small businesses were “neglecting the little guys. Today it claims 350,000 members, chapters in all 50 states, and a $95 million budget.” …

“The group did not return calls seeking comment for [Mother Jones‘] story, but one answer may lie in the NFIB’s evolving finances. It has traditionally been supported almost entirely by membership dues; as recently as 2009, its largest single donation from an outside entity was just $21,000. But during the last two years, the NFIB suddenly received nearly $7 million in the form of just five contributions of $180,000 or more—not exactly the kind of money that most small business owners can afford to fork over. Of those five donations, the only one with a known source is a $3.7 million transfer from Karl Rove’s Crossroads GPS, the dark-money arm of his political fundraising juggernaut. The 2010 donation was part of American Crossroads’ new strategy of ‘funding the right,’ Weekly Standard editor Fred Barnes explained in a Wall Street Journal op-ed, adding that American Crossroads decided ‘it was money well spent.'”

The Center for Media and Democracy (CMD), the progressive watchdog group that put together ALEC Exposed, recently launched NFIB Exposed. The site pulls together documents, articles and NFIB’s IRS filings and tracks the group’s lobbying efforts. CMD argues that, though it uses the slogan “the voice of small business,” NFIB’s political agenda is actually in line with large corporations.

The study Romney cited — that has also been mentioned by Senator Scott Brown (R-MA) in his debates with Elizabeth Warren — was paid for by the NFIB and produced by a former Bush Treasury appointee now at Ernst & Young was released over the summer and criticized on the White House blog. Mother Jones Josh Harkinson noted that analysts at the nonpartisan Congressional Budget Office and the Joint Committee on Taxation have said that Obama’s plan to use new tax revenue to pay down the deficit would “help the economy in the long run by leading to lower interest rates and higher investment — the opposite of what the NFIB study concluded.”

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