Fact Checker

Fact Checker: One billboard in Cedar Rapids, Iowa

A billboard against U.S. Rep. Rod Blum by Mad Dog PAC along I-380 in Cedar Rapids on Thursday, Mar. 15, 2018. (Stephen Mally/The Gazette)
A billboard against U.S. Rep. Rod Blum by Mad Dog PAC along I-380 in Cedar Rapids on Thursday, Mar. 15, 2018. (Stephen Mally/The Gazette)

Introduction

“He raised our taxes and enriched himself.”

Source of claim

This message attacking U.S. Rep. Rod Blum, R-Dubuque, is on a billboard on Interstate 380 in Cedar Rapids. The left-leaning Mad Dog PAC paid for it and said it’s the 22nd nationwide plastered with messages against Republicans and “any other elected official who is protecting the Trump regime.”

The PAC’s founder is Claude Taylor, who describes himself on Twitter as a “veteran of 3 presidential campaigns, served on White House staff (Clinton) ... Veteran political prankster.” He tweeted about the Blum billboard Feb. 18 and 21.

The PAC made news earlier this month with a Pensacola, Fla., billboard calling the National Rifle Association a terrorist organization.

Analysis

Claim 1: A Mad Dog staffer told the Fact Checker the Blum claims are based on the Republican tax cut bill passed in December, which Blum voted for Dec. 20. President Donald Trump signed the bill into law Dec. 22. Congress.gov reported.

The billboard’s first claim is that Blum “raised our taxes” by voting for the Tax Cuts and Jobs Act, or HR 1.

The Congressional Budget Office has estimated HR 1 will increase deficits to $1.8 trillion by 2027. The reason for that is it gives tax breaks to nearly all Americans, at least in the early years of the legislation. Then some personal tax credits begin to expire, such as a $500 credit for non-child dependents that ends in 2025.

“We find the bill would reduce taxes on average for all income groups in both 2018 and 2025,” the Tax Policy Center, a partnership between the Urban Institute and the Brookings Institution, said in a Dec. 22 analysis of the new law.

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The GOP-controlled House Ways and Means Committee released a report listing the estimated impact on taxpayers from each Congressional district who take a new, larger standard deduction. The committee says a four-person household in Iowa’s 1st District, which includes Cedar Rapids, Waterloo and Dubuque, with a median annual income of nearly $90,000 would pay about $2,500 less in taxes under the new plan.

The PAC’s claim about Blum increasing “our” taxes is misleading in that it implies middle-class Americans will pay increased taxes right away. That’s not true. Some Americans will pay more in the future if Congress doesn’t extend some of the tax credits.

“Compared to current law, 5 percent of taxpayers would pay more tax in 2018, 9 percent in 2025, and 53 percent in 2027,” the Tax Policy Center reports.

Billboards aren’t known for subtlety, but this claim needs more context. As it was, we give that claim a D.

Claim 2: The second claim asserts Blum “enriched” himself with the tax vote.

The Tax Cuts and Jobs Act reduces the top tax rate for the wealthiest Americans from 39.6 to 37 percent and raises the threshold for that top rate to $500,000 for individuals. This means fewer people will have to pay the highest rate. And for those who do, the rate is lower.

“In general, higher income households receive larger average tax cuts as a percentage of after-tax income, with the largest cuts as a share of income going to taxpayers in the 95th to 99th percentiles of the income distribution,” the Tax Policy Center notes.

As the 33rd richest member of the U.S. House in 2015 with an estimated net worth of $20 million, according to OpenSecrets.org, Blum is among wealthy Americans who will benefit most from the bill.

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The bill also cuts the corporate tax rate from 35 to 21 percent, reduces the estate tax allowing individuals to pass on $11 million tax free, and permits “pass-through” companies like partnerships and S corporations to deduct 20 percent of their income tax free until 2025.

Blum is chief executive officer of Digital Canal Corporation, which produces construction estimating software.

We give the billboard’s second claim an A.

Conclusion

Blum joined the vast majority of the GOP party in voting for HR 1. This bill cuts taxes for most Americans in the short term, with higher income brackets expected to reap the largest rewards. The two claims on the Mad Dog PAC billboard have split grades, but since the first claim — in bold text on the billboard — affects more people, we’re going to give it more weight for an overall grade of C.

Criteria

The Fact Checker team checks statements made by an Iowa political candidate/office holder or a national candidate/office holder about Iowa, or in advertisements that appear in our market. Claims must be independently verifiable. We give statements grades from A to F based on accuracy and context.

If you spot a claim you think needs checking, email us at factchecker@thegazette.com.

This Fact Checker was researched and written by The Gazette’s Erin Jordan.

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We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

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