Welcome to Ad Watch, in which the BDN breaks down who is behind the political ads you’re seeing and whether what they are saying is true.
A new ad from a Democratic super PAC says U.S. Sen. Susan Collins voted to increase taxes on middle-class families. But most Mainers actually saw taxes go down due to the 2017 Republican tax law backed by Collins, though it was set up in a way that low- and middle-income families could see their taxes go up later.
The ad: “This” by Senate Majority PAC
Who is behind it
Senate Majority PAC is affiliated with Democratic leadership. It has spent more than $28 million to boost Democratic U.S. Senate candidates this cycle, including $4.8 million in the Maine Senate race. As a super PAC, Senate Majority PAC can take unlimited funding from a variety of sources. It has also received millions of dollars through an affiliated dark-money group, Majority Forward, which is difficult to trace.
The major claims, with context
The ad reiterates a common refrain Democrats have used against Collins this cycle: She used to represent Maine well but has since changed, suggesting that money from outside interest groups has swayed her. Collins has repeatedly denied that.
The ad begins by referencing $5.7 million Collins received from special interests, which refers to contributions from corporate-affiliated political groups to the Republican senator’s campaign committee and her leadership PAC from 1996 to the present. The figure is accurate, though the ad does not mention the time frame.
The remainder of the ad centers around Collins’ vote for a 2017 Republican-led tax bill, alleging that Collins made Maine families pay more in taxes while corporations got a $1.3 trillion tax break. Although the benefits of the law skew towards the wealthy, it initially led to a tax decrease for most Maine families at all income levels.
One analysis by the Tax Policy Center found that 80 percent of families would see a tax cut in the first year, while only 5 percent of families were likely to pay more taxes in 2018 due to the law. The Institute for Taxation and Economic Policy, a progressive think tank cited by both Republicans and Democrats, estimated that Maine families in the lowest 20 percent income bracket would see their average tax payments decrease by $70, or 0.5 percent for the year 2019 due to the law. Families in the top 5 percent of incomes in Maine would see their taxes decrease by more than 2.5 percent on average.
Between income, corporate and pass-through taxes, the bill may have initially pumped $1 billion into Maine’s economy, though its provisions that help low-income people are set to expire in the coming years. By 2027, the institute predicted that Maine families in the lowest 20 percent income bracket would be paying an additional $340 in taxes on average, while only the richest 20 percent of families in Maine would get a tax cut.
It is worth noting, however, that Congress could always vote to extend the tax breaks for low- and middle-income families. That’s what former President Barack Obama wanted to do with tax cuts he inherited that were set to expire in 2011. While he wanted to repeal breaks for wealthier people and extend them for others, he made a deal with Republicans extending them all.
The ad also alleges that the bill constituted a “trillion dollar tax break for corporations.” That’s based on a part of the bill that cut the corporate tax rate from 35 percent to 21 percent. The congressional Joint Committee on Taxation estimated that provision would reduce tax collection by $1.3 trillion over a decade, which is the figure the ad cites.
The committee also predicted that other changes to the tax code would partially offset that, so the overall reduction in taxes collected from businesses of all sizes would only be $329 billion. However, the Congressional Budget Office revised predictions after corporate tax receipts in 2018 and 2019 were lower than expected. The agency did not try to speculate why revenues were down, so the jury is still out on exactly how much the bill reduced corporate taxes.
While the ad’s assertion that Collins voted to make middle-class families pay more did not come from nowhere, it implies an immediacy that is not there. It is missing key context that the bill she voted for caused taxes for low- and middle-income families to go down, at least for now.