The nonpartisan Factcheck.org has debunked two of the Kerry campaign’s new ads about President Bush’s tax record:
• Ad #1:
• Sen. Kerry: “Here’s the truth about taxes. After nearly four years under George Bush, the middle class is paying the bigger share of America’s tax burden and the wealthiest are paying less. It’s wrong. We need to cut taxes on the middle class, not raise them. We also need to get healthcare costs under control and lower our nation’s deficit. I don’t believe the wealthy need another tax cut. I believe ordinary Americans need someone who will fight for them.”
Kerry claims in an ad that appeared this week that “the middle class is paying the bigger share of America’s tax burden and the wealthiest are paying less.” Actually, all income groups have seen their burden reduced . Kerry’s wording could lead some to think middle-income taxpayers are paying more of the tax burden than upper-income taxpayers, which is false.
As we pointed out before in an article on another Kerry ad, figures from the nonpartisan Tax Policy Center show that even after Bush’s tax cuts, the most affluent 20 percent of taxpayers still pay 63 percent of all US taxes, including income, payroll and excise taxes. Those in the middle 20 percent pay 10.5 percent, a much smaller share. So, strictly speaking, the highest -income taxpayers still pay by far the larger share of taxes than the other 80 percent.
What Kerry has said previously is that middle-income taxpayers pay a larger share — meaning a larger share than they did before and not a larger share than more affluent groups. And it’s true that the middle 20 percent has seen their share of the tax burden go up — by 2/10ths of one percent — even as their taxes have come down. Those between the top and middle groups have seen their share of the burden go up 0.7 percent. On the other hand, those in the lowest two groups have seen very slight declines in the share of all taxes they pay as well as in the amount of taxes they pay, something Kerry doesn’t mention when talking about the burden on the “middle.”
• Sen Kerry: “The President has made a choice of a policy that actually uses your tax money to reward the company that goes overseas. You explain the common sense of that to me, ladies and gentlemen. You’re giving an incentive to a company to go overseas. And when I’m President, my choice, we’re closing those tax loopholes and we’re using the money to invest in companies that make jobs here.”
A Kerry ad running heavily last week after first airing Oct. 6 says “the president has made a choice that actually uses your tax money to reward the company that goes overseas.” But in fact, Bush’s “choice” has been to maintain the status quo, opposing a Kerry proposal to change the law.
As we explained earlier, Kerry is referring to a feature of the US tax code that has been there since the corporate income tax was first adopted, through both Democratic and Republican administrations. Economists say it is a relatively minor factor in the decisions companies make to locate jobs overseas. Even Kerry admits his own tax-change proposal won’t end the “outsourcing” of jobs overseas. For more, see our July 29 article.
