Saturday, April 04, 2020
Hawai'i Free Press

Current Articles | Archives

Friday, April 09, 2010
FactCheck.org: Dems attack ad against Djou “False”
By News Release @ 3:51 PM :: 7989 Views :: Maui County, Education K-12, Energy, Environment, National News, Ethics

A False Tax Attack

A Democratic ad claims a GOP House candidate pledged to protect breaks for sending jobs abroad. He didn't.

by Brooks Jackson April 9, 2010 LINK>>>http://factcheck.org/2010/04/a-false-tax-attack/?utm_source=twitterfeed&utm_medium=facebook

Summary

A new Democratic attack ad accuses a Republican House candidate in Hawaii of signing a pledge protecting tax breaks for sending jobs overseas. It could be a prototype of future attack ads against any number of other Republican House members and candidates, most of whom have signed the anti-tax pledge in question.

But we find the ad to be false. The pledge only protects corporations from an increase in taxation overall. It explicitly allows elimination of any specific tax deduction or credit if matched dollar-for-dollar by an overall cut in rates. And it says nothing about jobs.

Analysis

The Democratic Congressional Campaign Committee announced April 7 that it was running a new attack ad in Hawaii accusing Republican House candidate Charles Kong Djou of signing a pledge "that protects tax breaks for companies that send jobs overseas."

It’s an ad that the Democrats could run against nearly any Republican House candidate, all but a few of whom have signed the anti-tax pledge in question. But the ad is not true.

It was called "blatantly false" by Americans for Tax Reform, the Republican-leaning group that got Djou’s signature on its anti-tax pledge. We agree. ATR’s tax pledge does protect corporations in general — but only from an overall increase in taxes. It says nothing about jobs at all. More important, it does not rule out an overhaul of the tax code. Signers agree to oppose any "net" reduction of deductions or credits "unless matched dollar for dollar by further reducing tax rates." It says:

ATR’s Pledge

I will:

ONE, oppose any and all efforts to increase the marginal income tax
rates for individuals and/or businesses; and
TWO, oppose any net reduction or elimination of deductions and
credits, unless matched dollar for dollar by further reducing tax rates.

That leaves ample room for elimination of any number of special tax breaks so long as the overall level of taxation is not increased. To claim that this "protects" any particular provision of the tax code is simply untrue.

A Faulty Argument

When we asked the DCCC for evidence to support its claim, the group pointed to a "legislative alert" that Americans for Tax Reform issued in 2007. The alert warned that the anti-tax pledge would be violated by a vote for a proposal by Democratic Rep. Lloyd Doggett of Texas. It said that Doggett’s language "takes away a net deduction from the U.S. corporate income tax [and] represents a clear and unambiguous violation of the Taxpayer Protection Pledge."

Doggett’s amendment would have raised corporate taxes by $7.5 billion over 10 years, according to an estimate from the nonpartisan staff of the Joint Committee on Taxation. So it did indeed clearly violate the ATR’s no-tax-increase pledge. It was attached to a farm bill that passed the House July 27, 2007, on a mostly party-line vote with Democrats overwhelmingly in favor and Republicans opposed. The measure caused a partisan uproar. President Bush threatened a veto. The Senate later stripped Doggett’s proposal out of the farm bill, and it was not included in the measure that became law May 22, 2008, after Congress overrode Bush’s veto.

But just as important, the Doggett tax measure did not even address the "tax break" that the DCCC ad addresses. Instead, the measure was aimed at foreign-owned corporations that have operations in the U.S. It was intended to clamp down on their use of overseas tax havens to avoid U.S. taxes, and makes no mention of jobs or employment, or of U.S. firms locating business operations overseas. It is laid out in Section 12001, page 850 of the bill passed by the House. So for more reasons than one, the ATR’s "legislative alert" provides no support for the claim in the ad.

 

A Minor Issue

The claim that the tax code favors locating jobs overseas has been a Democratic mantra since at least 2004, when John Kerry brought it up constantly in his campaign against then-President George W. Bush. It has some truth to it — but not much. As we reported in 2004, eliminating this incentive would have very little effect on U.S. employment. Multinational corporations based in the U.S. would still retain even more powerful incentives to locate some jobs in other countries, where wages are lower, and where many of their customers live and shop. And anyway, exported jobs account for only a small fraction of those the economy loses. When he was chairman of the economics department at Princeton University, and before he became chairman of the Federal Reserve Board, Ben Bernanke estimated that the total number of jobs lost to "offshoring" was roughly 1 percent of all jobs lost in any given year.

Although this issue has a negligible effect on U.S. employment, it still has powerful symbolic value, especially at a time when the unemployment rate is running at 9.7 percent and 15 million Americans are looking for jobs. And Democrats are growing increasingly worried that they could lose the House seat for which Djou is running. It’s a May 22 winner-take-all election to fill the seat vacated in February by Rep. Neil Abercrombie, who is running for governor. Two Democrats are running, and could split the party vote and allow Djou to win — in President Obama’s native state.

But none of that is an excuse for Democrats to misrepresent anyone’s position. Djou, a Honolulu city councilman with a degree in economics, boasts that he has never voted for a tax increase and would continue pushing for lower taxes in Washington if he wins. We don’t endorse or oppose Djou or his position on taxes. But to characterize his opposition to raising taxes as protecting tax breaks that send jobs abroad is wrong. Any tax benefit can be eliminated and offset by a rate cut or by other benefits without raising taxes overall, and without violating the terms of that pledge. This attack ad is false.

---30---

 

Sources

Berlin, Greg. "DCCC Releases New Ad in Hawaii." Democratic Congressional Campaign Committee. 7 Apr 2010.

"Charles and his values." Djou for Congress 2010. 10 Feb 2010.

Radman, Adam. "DCCC Attacks Charles Djou with False Claims about the Taxpayer Protection Pledge." Americans for Tax Reform. 7 Apr 2010.

"Federal Taxpayer Protection Pledge Signers." Americans for Tax Reform. Undated Web page, accessed 9 Apr 2010.

"Taxpayer Protection Pledge." Americans for Tax Reform. Undated Web page, accessed 9 Apr 2010.

"Legislative Alert: Doggett Language in H.R. 2419, House Farm Bill, is a Violation of Taxpayer Protection Pledge." Americans for Tax Reform. 25 Jul 2007.

"Estimated Budget Effects Of The Revenue Provisions Contained In H.R. 2419, The "Farm, Nutrition, And Bioenergy Act Of 2007," As Passed By The House Of Representatives." The Joint Committee on Taxation, United States Congress. 14 Jan 2008.

"FINAL VOTE RESULTS FOR ROLL CALL 756." Clerk of the House, United States Congress. 27 Jul 2007.

Morgan, Dan. "On Eve of Vote, Farm Bill Draws Threat of a Veto GOP Fights Tighter Corporate Tax Rules." The Washington Post. 26 Jul 2007.

"PUBLIC LAW 110–234—MAY 22, 2008 122 STAT. 923." U.S. Government Printing Office. 22 May 2008.

"H.R. 2419, Farm, Nutrition, and Bioenergy Act of 2007 (Engrossed as Agreed to or Passed by House). U.S. Government Printing Office. 27 Jul 2007.

Jackson, Brooks. "Kerry Blames Corporate Tax Code for Shipping Jobs Overseas." 28 Jul 2004.

"Employment Situation Summary." Bureau of Labor Statistics. 2 Apr 2010.

"Issues." Djou for Congress 2010. 12 Feb 2010.

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

808 State Update AM940

ABCDEFG Blog

ACA Signups Hawaii

ACCE

ALEC

Alliance Defending Freedom

Aloha Life Advocates

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

American Mothers of Hawaii

AMVETS-Hawaii

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Audit The Rail

Ballotpedia Hawaii

Better Hawaii 

Blaisdell Memorial Project

Broken Trust 

Build More Hawaiian Homes Working Group

CAFR Hawaii

Castaway Conservative

Children's Alliance Hawaii

Children's Rights Institute

ChinaTownWatch.com

Christian Homeschoolers of Hawaii

Citizens for Recall

Cliff Slater's Second Opinion

Coffee Break

CSIS Pacific Forum

DAR Hawaii

DeedySupport.com

DVids Hawaii

E Hana Kakou Kelii Akina

E Māua Ola i Moku o Keawe

Farmers For Choice Hawaii

FIRE

Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Get Off Your Butts!

God, Freedom, America

Grassroot Institute

Habele.org

Hawaii Aganst Assisted Suicide

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crime Victims' Rights

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defending Marriage

Hawaii Defense Foundation

Hawaii Families for Educational Choice

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Firearm Community

Hawaii Fishermen's Alliance

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii Meth Project

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Right to Life -- Big Island

Hawaii Right to Life -- Oahu

Hawaii Shield Law Coalition

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HI Coalition Against Legalized Gambling

HIEC.Coop 

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Homeless Crisis

Honolulu Navy League

Honolulu Traffic

Horns of Jericho Blog

House Minority Blog

House Republican Caucus YouTube

HPACC

Hump Day Report

I Vote Hawaii

If Hawaii News

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes

KeyWiki

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii

NARTH

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons 

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

SIFE Remington

SIFE W. Oahu 

Sink the Jones Act

Smart About Marijuana--Hawaii

St Marianne Cope

State Budget Solutions Hawaii

State Policy Network

Statehood for Guam

Tax Foundation of Hawaii

The Harriet Tubman Agenda

The Long War Journal

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

Truth About Trade & Technology - Hawaii

UCC Truths

Union Members Know Your Rights

US Tax Foundation Hawaii Info

Valor in the Pacific

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT