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Fact Checker

Fact Checker: Anti-Blum PAC ad misleads

U.S. Rep. Rod Blum, R-Dubuque, speaks May 2 at Jerald Sulky Co. in Waterloo to tout federal income tax cuts passed by Congress. (Thomas Nelson/Waterloo-Cedar Falls Courier)
U.S. Rep. Rod Blum, R-Dubuque, speaks May 2 at Jerald Sulky Co. in Waterloo to tout federal income tax cuts passed by Congress. (Thomas Nelson/Waterloo-Cedar Falls Courier)

“Rod Blum voted for the new tax law that gives 83 percent of the tax breaks to the wealthiest 1 percent — like Rod Blum. But most Americans will pay higher taxes.”

“AARP says people over 50 will pay up to $1,500 more for health insurance next year.”

Source of claims

A television ad now airing called “Worst of Washington” by Change Now, a left-leaning Washington, D.C.-based super PAC that first filed with the Federal Election Commission in July.

Open Secrets reported Change Now spent $1.17 million in 2018, through Aug. 31, all against Republicans.

Analysis

We’ll break this down into four claims.

Fact Checker’s first step is to reach out to the source of the claims and ask where it got the information. Change Now spokesman Ben Wexler-Waite provided citations for all the ad’s claims. We decided to link claims 1 and 3 because they are closely related.

Claim 1: “Rod Blum voted for the new tax law that gives 83 percent of the tax breaks to the wealthiest 1 percent ...”

Claim 3: “ ... Most Americans will pay higher taxes.”

The ad focuses on U.S. Rep. Rod Blum’s support of the Republican tax cut bill, the Tax Cuts and Jobs Act, or HR 1. The Dubuque Republican, facing a November challenge from state Rep. Abby Finkenauer, D-Dubuque, voted for the tax cut Dec. 20. President Donald Trump signed the bill into law Dec. 22.

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

The Tax Policy Center, a partnership between the Urban Institute and the Brookings Institution, said in a Dec. 17 analysis of the new law, it will “reduce taxes on average for all income groups in both 2018 and 2025.” The Tax Policy Center says it strives to provide independent analysis, although critics have said it underestimates the potential economic boost the tax cut could provide.

In 2018, taxpayers are expected to pay about $1,600 less on average, increasing their after-tax income 2.2 percent, the center reported. By 2025, the average cut shrinks to just under $1,600, or 1.7 percent of after-tax income.

Things change in 2027 if Congress doesn’t renew the personal tax credits.

That year, taxpayers in the top 1 percent would get an average tax cut of .9 percent, which accounts for 83 percent of the total benefit that year, the Tax Policy Center reported. Only one-quarter of American taxpayers would experience a tax cut in 2027, averaging about $1,500, while 53 percent would face an average tax increase of about $180, the center reported.

The Change Now ad bases its claims on the 2027 numbers — but without saying so in the ad. This is misleading because it ignores the first nine years of the law and the possibility many of the popular tax credits will be extended.

For these two related claims, we give the Change Now ad a D.

Claim 2: Now let’s get to the claim about Blum being in the wealthy 1 percent slated to benefit in 2027.

To be in that upper echelon, individuals must have an adjusted gross income of at least $480,930, according to IRS figures quoted by CBS News in February.

As a rank-and-file member of Congress, Blum gets $174,000 a year. But his business holdings bring in much more income. Blum owns a construction software company, Digital Canal, and also has interests in Tin Moon, a marketing firm for which he is under investigation for initially not disclosing.

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Open Secrets reported Blum’s net worth in 2015 was $20.4 million, which ranked him 33rd in the House. Roll Call in February used Blum’s disclosure documents to set his wealth at $10 million.

While we don’t know exactly how much income Blum makes a year, his net worth puts him within the 1 percent. This claim gets an A.

Claim 4: “AARP says people over 50 will pay up to $1,500 more for health insurance next year.”

The Republican tax cut removed the requirement most Americans have a minimum level of health insurance after 2018. Taking these people out of the health insurance market will increase premiums for those remaining by an average 10 percent, according to November 2017 Congressional Budget Office analysis.

The AARP estimates premiums for 50-year-olds could rise by an average $890 in 2019 and 55-year-olds could pay $1,100 more. It’s only when AARP estimates the impact for 64-year-olds that the premium would be an average $1,490 higher — though the ad says the $1,500 impact is for “people over 50.”

While the study finds rates will increase for those over 50, the ad overstates the conclusion. This claim gets a D.

Conclusion

If Change Now’s “Worst of Washington” ad had said the tax cut bill “will give” the top 1 percent of Americans 83 percent of the tax cuts or included 2027 as the year the majority of Americans would pay more, then the claims would be accurate. As is, the ad gives the impression most Americans will pay more this year, which is false. While there are some claims in this ad that are true — Blum did vote for the tax cut bill and he’s a 1 percenter — the fearmongering is so egregious that Fact Checker rates the overall claims a D.

Criteria

The Fact Checker team checks statements made by an Iowa political candidate/officeholder or a national candidate/officeholder 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.

l This Fact Checker was researched and written by Erin Jordan of The Gazette.

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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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