In one of his latest television ads, Republican U.S. Senate hopeful Charlie Summers recycles two familiar claims against his two main opponents, but makes an overstatement about independent Angus King’s tax plans.

The main claim of consequence is one that says King would like to raise taxes on small businesses by 130 percent. That’s the absolute worst-case outcome on certain capital gains tax increases, making it a trumped-up statement.

The ad also claims that Maine had the nation’s highest tax burden under King, which is true depending on the source, and that Democrat Cynthia Dill supports tax increases — which is true but only for those making more than $250,000 annually.

“Angus King left Maine with the nation’s highest tax burden.”

This was widely reported in 2001 using numbers from 1998. That was several years before the end of King’s second term.

We’ve gathered some later King-era numbers, and while they show that Maine didn’t have the nation’s highest state and local tax burden at the time, it was a close second.

A July 2001 Portland Press Herald story reported the results of a table published in The New York Times. Using 1998 Census data, it said Mainers paid 14.5 percent of their earnings on state and local taxes. That was the highest in the nation.

But King said that there errors in the property tax data used by the Times, and that sales tax collections were overstated.

King and others blamed the ranking largely on low incomes, saying in the article, “We have a tax problem, but we also have an income problem. And if we have an income problem, we have to spend more to solve it. It’s a dilemma for us.”

In 2002, Maine was deemed to have the second-highest state and local tax burden at nearly 13 percent of personal income, according to a 2006 document from the Maine Office of Fiscal and Program Review, which said the tax burden came down by then by about a percentage point from its peak in 1998.

Verdict: Numbers the Summers campaign cited were a little dated to say they’re from “when King left office.” Whether those numbers were right really depends on the way you count it up. But there’s a good amount of evidence that we were second later on. Due to minor issues with numbers and time, we’ll downgrade this claim on our truth scale.

We rate this statement mostly true.

“Now he wants to raise taxes on small business” by 130 percent.

If the ad said “up to” 130 percent, we wouldn’t have an issue.

But according to recent numbers on business taxes, fewer than 3 percent of American small businesses would see that kind of an increase if it their capital gains were taxes as income, which is the proposal that King supports.

Capital gains are profit from the sale of a property or investment, and they are currently treated preferentially in the country’s tax system. The top federal capital gains tax rate is 15 percent, compared to the top federal income tax rate, 35 percent.

As the Summers ad says, it would be a 133-percent increase to go from paying a 15 percent rate to a 35 percent rate.

But how many small businesses are in that top 35-percent income tax bracket right now?

We don’t have a pinpoint figure, but we have a ceiling that number is surely under. In a 2010 report, the Joint Committee on Taxation found that 3 percent nationally, or 750,000, of those expected then to report positive income in 2011 were in the top two income tax brackets of 33 and 35 percent. So the 3 percent figure overshoots the real number by an entire tax bracket.

It’s safe to say that far fewer than 3 percent of national small businesses have the potential to be hit by a 130 percent tax increase if the feds tax gains as income. Others will be taxed at the other rates — 10, 15, 25, 28 or 33 percent, depending on income and barring possible changes to the the tax structure.

Verdict: The 130 percent figure is real, but it’s a ceiling the Summers campaign presents as a normal situation. Relatively few small businesses will get touched by it nationally.

We rate this statement mostly false.

 

“Democrat Cynthia Dill? She supports Obama’s plan to raise taxes.”

Yes, but this “plan to raise taxes” will only affect you if your household is making $250,000 annually. That would put you in the top 4 percent of American earners, according to a Wall Street Journal calculator.

It’s a reference to the president’s preference to not extend Bush-era tax cuts to those making more than $250,000 annually. In a September Truth Test, Dill said she supports it.

Verdict: It’s no broad-based tax raise, because 96 percent of Americans wouldn’t be affected, but if the president has his way, those making $250,000 or more would get a bump in taxes.

We rate this statement true.

 

We rate this overall ad mostly true.

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