Obama ad put through Truth Test - 13abc.com Toledo (OH) News, Weather and Sports

Obama ad put through Truth Test

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Narrator: "You work hard, stretch every penny, but chances are you pay a higher tax rate than him: Mitt Romney made $20 million dollars in 2010, but paid only 14% in taxes-probably less than you. Now he has a plan that will give millionaires another tax break and raises taxes on middle class families by up to $2000 dollars a year. Mitt Romney's middle class tax increase: he pays less, you pay more."

Now that the political campaign season is gearing up, 13abc is bringing back the award winning "Truth Test."

13abc's Bill Hormann is spotting political ads and checking their claims.

Our first Truth Test looks at a pro-Obama ad called "Stretch".   But when it comes to truth, the ad itself is a *stretch*.

"You work hard, stretch every penny..."

The ad forms the basis of the president's attacks against Mitt Romney,  namely, that he's a rich guy who pays very little in taxes.

We found a voter, Daryl Rodney.  He's seen the ad but wonders what to believe. 

"Mitt Romney made 20 million dollars in 2010, but only paid 14 percent in taxes. Probably less than you."

Well, 13abc looked into Romney's taxes and found in 2010, Mitt Romney made $21. 7 million and paid $3-million in taxes.  That's a 13.9% tax rate.

But Romney's income was from dividends and capital gains, which are taxed at 15%.

So Romney was right in line.  He paid a little less because he donated $3-million to charity, which lowered his taxable income.

When we mentioned that to our voter Daryl Rodney about that, he told 13abc reporter Bill Hormann, "That's why it makes it very hard to me to believe ads."

According to the Internal Revenue Service, 40% of all Americans pay *no federal income tax*.

And if you make up to $200-thousand dollars, which is 97% of all taxpayers, you pay an effective federal rate of 12%, that's lower than Romney's 13.9%.

Misleading

But if you add *payroll taxes* like Social Security and Unemployment Insurance,  20% of all Americans pay a 15.5% tax rate.  That IS higher than Romney pays.

However, adding in payroll taxes is unfair to Romney because no one pays Social Security or Unemployment Insurance on dividend or capital gains income.

So considering all of that, we say this ad is... *FALSE*

We have to call it FALSE because we want to hold candidates to a high standard of fairness and accuracy.

For one, the ad does not specify that it's including payroll taxes in the calculation... that's flat out misleading.

And it's unfair to Romney because if you take out that payroll tax calculation, 97% of Americans paid *less or no tax* compared to Romney.

The ad *FALSELY* implies otherwise.

As for the charge that Romney plans on raising taxes $2000 on middle class families, He has not proposed raising taxes on middle-class families by $2,000 as the ad suggests.

The Obama camp uses a study by the nonpartisan Tax Policy Center of the Brookings Institution and the Urban Institute to make that claim.

According to the New York Times, "Mr. Romney's plan would cut income tax rates by 20 percent, among other tax breaks"  Romney would off-set lost revenue but has not specified how he would do that.

The study assumes Romney would have to eliminate various tax breaks like mortgage-interest deductions that would result in a net tax increase for 95 percent of taxpayers, while the wealthiest 5 percent would pay less. Those in middle-income brackets would pay on average $546 more a year, according to the study, and upper-middle class taxpayers would pay $1,880 more, while the taxes of the richest 1 percent would be cut by $29,282.

Mr. Romney's advisers tell the New York Times, the study was flawed because it did not account for economic growth they believe would be stimulated by a separate plan to restructure corporate taxes and by lowered deficits.

I'm Bill Hormann... And we just put that ad through the *Truth Test*

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