Attack Ad by Anti-tax Group Too Close for Dean's Comfort

Summary

An anti-tax group started running an attack ad Thursday Dec. 4 in Iowa and New Hampshire saying “Howard Dean says he’ll raise taxes on the average family by more than nineteen hundred dollars a year,” and suggesting he’s in the mold of Democratic presidential losers including George McGovern, Walter Mondale, and Michael Dukakis.

Dean says he’s responding with an ad of his own saying the conservative, anti-tax Club for Growth “falsely” attacks him.

But independent, nonpartisan calculations show that Dean’s call to repeal the Bush tax cuts really would mean big tax increases, often exceeding $1,000 even for middle-income families. The increases would be especially severe for those with children under age 17.

Analysis

Howard Dean is firmly on the record in favor of repealing both tax-cut bills signed by President Bush in 2001 and 2003, and returning to tax rates that prevailed under Bill Clinton.

That would do more than just canceling some scheduled tax cuts that haven’t yet taken effect — it would clearly require raising taxes from where they are today. The table below, from the nonpartisan Tax Policy Institute, calculates how the Bush cuts are affecting families in various situations for the current tax year. Clearly the affluent gain most, just as they currently pay the most taxes. But a total repeal of the Bush tax cuts would also cost $350 for a single taxpayer making as little as $15,000 a year. And for a typical middle-income family making $50,000 a year, with two children under age 17 qualifying for sweetened per-child tax credits, total repeal would amount to a tax increase of $1,773.

Combined Effect of Bush Cuts for 2003: Typical Families
(Amounts by which federal income taxes would rise if cuts are repealed)
Income	Single	Married Filing Joint
# of kids under 17 –>	0	0	1	2	3
$10,000	$110	$76	$0	$0	$0
$15,000	350	142	610	661	661
$25,000	350	702	1,210	1,661	1,579
$35,000	350	932	1,433	1,897	2,245
$50,000	669	773	1,272	1,773	2,271
$75,000	1,318	1,714	1,817	1,938	2,437
$100,000	2,001	2,596	3,004	3,413	4,510
$125,000	2,695	3,277	3,435	4,094	4,571
$150,000	3,460	4,010	3,918	3,827	4,735
$200,000	5,218	5,623	5,531	4,918	4,364
$500,000	15,585	12,328	12,328	12,328	12,328
$1,000,000	37,713	38,426	38,426	38,426	38,426
Source: Tax Policy Center table 8.1

The Club for Growth ad is misleading in some ways. The “average” figure it mentions is not an average at all, but a calculation of how much repeal of the Bush cuts would cost a $40,000-a-year married couple with two children under 17. That calculation is from the Bush administration’s own Office of Tax Analysis, but it’s roughly in line with the figures calculated independently by the Tax Policy Center for families just above and below that income level. Still, most families are not getting that much of a tax cut now and would not see their taxes go up that much under repeal. Roughly one in four workers get no benefit at all because they now earn too little to pay any federal income taxes at all, for example.

The ad is also misleading when it claims that Dean would “bring back the death tax.” In fact, the estate tax is still on the books and won’t be phased out until the year 2010 even under the Bush tax cuts. You can’t “bring back” something that’s not gone.

In fairness to Dean, he has promised not only to repeal Bush’s cuts but also to “strive for greater tax fairness for middle class working families” through such things as closing corporate loopholes, ending “unfair tax preferences” and cracking down on tax cheats. But so far those vague promises lack any specifics — not even a definition of “middle class” — so it’s impossible to calculate who would benefit or whether anyone would gain enough to offset what they would lose through Dean’s promised repeal of cuts now on the books.

The attack ad got a reaction from the Dean campaign: “It’s obvious that the general election is already underway,” Campaign Manager Joe Trippi said in a news release.”We will not let such false attacks like today’s by the Republican ‘Club for Growth’ go unanswered.” The Dean camp released the text of a new ad it said it was preparing to air in Iowa and New Hampshire starting the weekend of Dec. 6.

Here are the full texts of both ads:

Text of Club for Growth Ad:
“Tax Redux”

Announcer: For three decades, Democratic presidential candidates have supported huge tax increases.

This year, they’re back.

Howard Dean says he’ll raise taxes on the average family by more than nineteen hundred dollars a year.

Dean says he’ll raise income taxes, marriage taxes, capital gains taxes, dividend taxes, even bring back the death tax.

These Democrats found out that Americans can’t afford higher taxes.

Will Howard Dean ever learn?

Text of Dean Response:

“Club for Truth”

Announcer: George Bush. His economic policies created the largest deficit in our county’s history.

Now he’s hiding behind negative ads that falsely attack Howard Dean.

The Truth? Howard Dean balanced budgets 11 years in a row. He’s a fiscal conservative who cut state income taxes–twice. Raised the minimum wage. And provided health care coverage for nearly every child in his state.

Dean: I’m Howard Dean. I approved this message because they’re not trying to stop me, they’re trying to stop you.”

Media

Watch Club for Growth Ad: “Tax Redux”

Supporting Documents

View Calculations by Bush Treasury Department’s Office of Tax Analysis of effects of repealing 2001 and 2003 tax cuts

Sources

Table 8.1 “The 2001 and 2003 Tax Cuts for Hypothetical Families: By Type of Filer for Tax Year 2003” Tax Policy Center (Washington DC) 27 Oct. 2003.

“If Democrats repealed the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA), they would be raising taxes on millions of hardworking American families” US Department of the Treasury, Office of Tax Analysis 18 June 2003.