Fact Check: Ads Say Beasley Wants to Raise Taxes on People Making Under $75,000
It’s time to check North Carolina politics every week. This week, we look at a new ad between Republican Ted Budd and Democrat Cheri Beasley in this year’s race for the United States Senate. The ad claims Beasley supports raising taxes on incomes below $75,000.
Morning Edition host Marshall Terry talks with WRAL’s Paul Specht to find out if that’s true.
Marshall Terry: First Paul, who is behind this ad?
Paul Specht: Behind it is the Senate Leadership Foundation, which is a Republican-backed political action committee. Often called PACs, they are a fairly large group that often try to help Republican candidates across the country trying to win Senate seats.
Terry: Okay. Is the claim we heard a moment ago that Beasley wants to raise taxes on families making less than $75,000 true?
Specht: Not exactly. Now it has to do with the Inflation Reduction Act, but it was about a lot of things, from corporate taxes to green energy and things like that. (President Joe) Biden signed the bill into law in August. It does not change the federal tax rate for those who earn $75,000 or less a year. It does not change the rate for those making $
00,000 or less a year. Now it has to do with its effect.
A bunch of different groups looked at how this could affect workers and people in this bill through different things. right? And one of the things they looked at was how companies pass the cost of those higher taxes on to their workers, investors, et cetera.
There was a committee in Congress that studied the impact of the bill and found that the tax burden would be changed by approximately 1 percent to taxpayers. And if people make $75,000 a year, about half a percent. But we didn’t finish there. This investigation by the congressional committee itself was not comprehensive. It was investigated how corporate income taxes could be reduced. It did not look at other parts of the bill. For example, it did not count health care benefits for those covered by the Affordable Care Act and health insurance.
There is a group called the Committee on a Responsible Federal Budget. It is certainly not a congressional committee. It is non-profit. But they report that these subsidies for ACA plans, also known as Obamacare plans, would be “more than enough to offset the increase in the net tax burden for those making less than $00,000 a year.” So there are different ways of looking at how this legislation, the Inflation Reduction Act, would affect people. However, we found that the effect is mostly either small, delayed or net-neutral.
Terry: How does the Senate Leadership Fund, the Republican-support group behind this ad, justify this claim about Beasley? Do they have evidence they cite?
Specht: Well, they reported to a congressional committee that was just looking at how to pass a corporate tax increase. And you know that usually happens with lower returns for investors or lower wages for workers. And it was there. In fact, Republicans across the country have used it as a springboard to launch similar attacks on other Democrats running for office.
Terry: What is Beasley’s response to this argument?
Specht: First, we went back and looked at whether Beasley supports the Inflation Reduction Act? And it’s clear that he does. When it came up for a vote in early August, he tweeted that it would certainly help reduce costs across the United States and that voting against the bill would be “unforgivable.” And he criticized the North Carolina Sens. Thom Tillis and Richard Burr voted against it.
When we learned of the announcement, his campaign cited news articles and fact-checking not only from PolitiFact, but other groups such as the Associated Press, Bloomberg and New York Magazine, which showed that no, the tax rate on paper would not change. When people go to pay their taxes next year, they won’t see a different federal income tax rate as a result of this law. Those articles looked at whether it would affect people making $75,000 a year or less. And there are a number of groups that are trying to assess the indirect effects on humans. The University of Pennsylvania Tax Foundation’s Committee on Responsible Budgeting has a budget model calculator. And they all found that the indirect human impact of this legislation would be about 1% or less. And that means the impact on their take-home pay would be 1% or less, or it would be neutral based on one study, or it would be delayed by several years.
And of course, many things can change with the economy in three to five years. So we found that the impact of the bill on people making $75,000 or less is almost negligible or delayed.
Terry: How would you rate the claim made in this ad?
Specht: We mostly got it wrong. Whatever that means, it’s not entirely wrong. There is a grain of truth to this, which is that there are estimates showing that the anti-inflation bill would have little indirect effect on people earning $75,000 or less. But so much context is missing. There are other estimates that the legislation would not affect these people even indirectly. That’s why we mostly ended up with lies.
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