Did the N.C. General Assembly’s 2013 tax reform package raise taxes on 80% of North Carolinians?
In a television ad attacking U.S. Senate candidate and N.C. House Speaker Thom Tillis, pro-Democratic group Senate Majority PAC said yes. Glenn Kessler of the Washington Post examined the claims and awarded it “Three Pinocchios,” which is an ad featuring significant factual error and/or obvious contradictions.
The ad cites a report from the left-leaning Budget and Tax Center, which is affiliated with the North Carolina Justice Center. [Emphasis added.] But the data in the report comes from the Institute on Taxation and Economic Policy. Meg Wiehe, ITEP’s state tax policy director, actually works out of North Carolina and has seen the ad. “We have not said that 80 percent of taxpayers will pay more under this plan,” she said in an interview.
In fact, when the plan is fully phased in, Wiehe says that ITEP’s analysis of the income tax portion of the law shows that 49 percent of taxpayers will get a tax cut and 39 percent will get a tax increase. (This analysis includes the impact of lawmakers deciding to allow the expiration of the state’s earned income tax credit, which benefits low-income workers. Some analysts might argue the EITC is not a tax cut, but that’s another story. ITEP also calculated the results without the impact of the EITC. )
How could Senate Majority PAC get this so wrong? It has to do with the tyranny of averages–and a misreading of the data.
On its face, it is pretty absurd to think that a tax reform bill that cut rates and eliminated tax loopholes ended up raising taxes on 80 percent of the people in the state. Broadly speaking, the wealthy do appear to gain more from the 2013 tax overhaul, but they also pay the lion’s share of income taxes. And 39 percent of the people appear to face a tax increase, including some of the wealthiest people in the state–not 80 percent, all at the bottom.
Our old adage applies: If a factoid sounds too good to be true, it probably is. Senate Majority PAC should have checked the facts before rushing on the air with this ad.
Don’t quote me on this, but I think the Left is using Common Core math.