Friday, October 9, 2015

Corbett attacks Wolf with the 'H word' in new ad

A new TV spot from Pennsylvania Gov. Corbett's reelection campaign says Democratic opponent Tom Wolf wants to raise taxes on the middle class while paying a lower-than-average federal tax rate on his own household income.

Corbett attacks Wolf with the 'H word' in new ad

Tom Wolf and Gov. Tom Corbett
Tom Wolf and Gov. Tom Corbett

Gov. Tom Corbett (R) is running a new attack ad that accuses “millionaire” Democratic opponent Tom Wolf of plotting to raise the state income tax on middle-class families while himself paying a lower-than-average effective tax rate.

“Tom Wolf – higher taxes for you, less for him,” an actress says in the 30-second spot, which began running statewide Monday. As she speaks, with a dramatic sigh, the label “Hypocrite” – in capital letters and underlined in red – appears beneath a black-and-white image of Wolf on a small television set, talking.

The ad says that Wolf, part owner of a York building supplies company, paid an effective federal-income tax rate less than half that of the average taxpayer – the example used in a graph is 18.1 percent for an average household versus 8 percent for the Wolf family.

It also says that Wolf “moved his company to Delaware to avoid paying his fair share of taxes.”

This last charge is misleading at best. The company is located in Pennsylvania, though it was chartered in Delaware in 2006. The Corbett campaign suggests that the Wolf Organization uses the so-called Delaware loophole – involving a subsidiary paying royalties to a company chartered in the First State - to avoid Pennsylvania tax liability.

The Wolf Organization has said it does not use the loophole, however. It also declines to release its Pennsylvania corporate tax returns, and the state Revenue Department does not disclose taxpayer information due to privacy laws.

And the spot’s contention that Wolf would hike taxes on the middle class rests on his expressed intent as governor to raise the state income tax rate and shift it so higher earners would pay more. The idea is to use some of the new state revenue to increase the state’s share of schools costs, thus helping to lower local property taxes.

Wolf has not provided details of his tax-shifting proposal, which has been a policy goal of some governors of both parties for more than 40 years, so it is all but impossible to say how it might affect particular households.

During a recent interview with the Associated Press, Wolf did say that hypothetically, his plan could increase state income taxes on those households making more than $70,000 to $90,000 a year. The Corbett campaign argues that, in many counties such as in suburban Philadelphia, a family making a combined $90,000 is in the middle class.

The truth lies in how one defines “middle class,” and in the details of the actual proposal Wolf would make if he were elected.

Based on a release of three years of his federal tax-return data during the Democratic primary Wolf paid an effective tax rate of 7.3 percent on income of $1.4 million in 2010. Corbett’s campaign rounded that up to 8 percent by counting what it estimated would be his payroll, or Social Security, tax burden. A recent Congressional Budget Office report says that the average effective tax rate is 18 percent.

Wolf paid higher effective tax rates in the other two years released, though short of 18 percent. The effective tax rate is calculated by subtracting tax credits and deductions the taxpayer is entitled, reducing how much he or she owes the federal government.

Deductions include charitable contributions, and the Wolf campaign points out that he and his wife Frances have given millions of dollars to various causes.

Wolf has released a response ad, which Big Tent will review shortly.

Inquirer Politics Writer
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Inquirer staff writer Thomas Fitzgerald blogs about national politics.

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