Bloomberg News

Obama Ad Overstates Romney Tax Impact: Reality Check

September 04, 2012

Republican Presidential Candidate Mitt Romney

Mitt Romney, Republican presidential candidate, speaks at the Republican National Convention (RNC) in Tampa, Florida, on Aug. 30, 2012. President Barack Obama says Romney would help millionaires while forcing tax increases on the middle class. Photographer: Andrew Harrer/Bloomberg

Each side has made statements about the other’s positions in the presidential campaign. How do they square with the facts?

The Romney $2,000 Tax Increase

The Claim: President Barack Obama’s campaign charges Republicans with proposing a middle-class tax increase. “Under the Romney plan, a middle-class family will pay an average of up to $2,000 more a year in taxes,” a new ad says.

The Background: Mitt Romney has offered a tax plan that he says would lower rates, protect the middle class and still hold revenue flat. He hasn’t said what tax breaks he would cut to make up for rate reductions. Obama says Romney would help millionaires while forcing tax increases on the middle class.

The Facts: The Obama ad is an exaggeration that uses an outdated estimate. It relies on a report by the nonpartisan Tax Policy Center. The Washington-based center had tested Romney’s plan and said that, even if all tax breaks were dropped, it wouldn’t raise enough money from those with the highest incomes. The center said the likely outcome would be a $2,000 increase for taxpayers who make less than $200,000 and have children. However, after complaints from Romney allies, the authors changed some of their assumptions and came to the conclusion that only half of what they originally estimated would have to be shifted to those further down the income scale. That suggests a tax increase of $1,000, not $2,000.

Romney told Fortune magazine, “I will under no circumstances raise taxes on the middle class.”

Obama and Socialized Medicine

The Claim: A new super-PAC ad proclaims, “Under President Obama, America’s health care is becoming more like the Canadian system.”

The Background: This is the second time Americans for Prosperity, a super-political action committee founded with the support of David and Charles Koch, has run an ad featuring Shona Holmes, a Canadian who warns of the dangers of a government-run health-care system. Rather than wait several months for treatment in Canada, Holmes said, she sought care for a fatal brain tumor in the U.S. “To protect America’s patient-centered care, we must replace President Obama,” an announcer says. AFP is spending $6.2 million to broadcast the ad in 11 swing states.

The Facts: This ad is false. The U.S. health-care law didn’t implement a single-payer system, where all Americans are covered by the government, a key characteristic of Canadian health care. Additionally, the claim that Holmes would have died from her condition is “an exaggeration,” according to a Canadian neurosurgeon quoted in a July 31, 2009, report by the Canadian Broadcasting Corp. Holmes was diagnosed with Rathke’s cleft cyst, a benign, slow-growing tumor that’s not known to be fatal, the CBC said. Back home, Holmes was vilified as a traitor and received death threats, according to a July 30, 2009, report in Toronto’s Globe and Mail.

’Are You Better Off?’

The Claim: Democrats say Americans are “better off” than when Obama took office. Republicans say the public is worse off.

The Background: Whether Americans are better off or worse off has been a central question in presidential campaigns since President Ronald Reagan asked it in 1980. The issue exploded this week when Democrats waffled and Republicans pounced.

The Facts: The economy is stronger than when President Obama took office, but unemployment remains stubbornly high, so each side emphasizes the facts that make its argument look better.

Democrats stress the rising direction of the economy, which was contracting at an 8.9 percent annual rate during the final quarter of 2008, just before Obama took office. It grew at a 1.7 percent annual rate in the second quarter of this year. The U.S. lost 818,000 jobs in January 2009, and is now adding them, with a net increase last month of 163,000.

Republicans focus on the standard of living and employment prospects of middle-class families, which haven’t recovered to previous levels. The unemployment rate has been at least 8 percent since February 2009, the longest such stretch in monthly records that go back to 1947. Median household income began declining in President George W. Bush’s administration, shortly after the recession began in December 2007 and continued dropping until about a year ago, according to data from Sentier Research. Median household real income in June was $50,964, down from $53,508 in June 2009, when the economic recovery officially started.

--Richard Rubin, Lisa Lerer and Mike Dorning. Editors: Steven Komarow, Bob Drummond

To contact the reporters on this story: Richard Rubin in Washington at rrubin12@bloomberg.net; Lisa Lerer in Washington at llerer@bloomberg.net; Mike Dorning in Washington at mdorning@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net


Cash Is for Losers
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus