Dalton's 'Hole' digs McCrory on taxes

Most viewers, however, will be drawn in by the visuals of the big hole in the ground and may be wondering about the content, which is by and large provided by Dalton himself. Here's the script:

You know what they say, when you’re in a hole, stop digging.

I’m Walter Dalton, candidate for governor, and I sponsored this ad.

The commercial draws on themes that Dalton has used on the stump, and it's worth noting that Dalton is voicing these criticisms himself rather than leaving it to a surrogate. 

From a factual standpoint, Dalton raises two questions. Can McCrory really be held responsible for budget cuts by the legislature? And does McCrory have a plan to raise taxes on the middle class? 

Putting aside the adjective "drastic," is it fair or accurate to hold McCrory accountable for the acts of the legislature over the past two years? The House and Senate were held by Republican allies of McCrory, but he was not a member.

It would be fair to say that McCrory has been supportive of legislative Republicans on the stump. In fact, he has called for even deeper cuts to state spending in recent interviews. And McCrory campaign spokesman Brian Nick does not shy away from McCrory's ties to his fellow Republicans. 

"Of course Pat was supportive of the legislature not raising taxes while they sought to clean up the mess that Dalton created as budget chair. But assigning a former mayor with particular cuts that were made by a legislature that he is not a part of is beyond a ridiculous reach," Nick said.

Tying a politician to others perceived to be less popular is a common tactic in political ads. For example, in the 7th Congressional District race, Republicans are linking Rep. Mike McIntyre, a Democrat, unfavorably to the policies of U.S. House Speaker Nancy Pelosi and President Barack Obama.

And the ad doesn't say McCrory "made" cuts to education, merely that he supported them. Therefore, this claim appears to be factual. 

It would be worth noting, however, that Dalton has his own history with cuts to education. Democrats cut education spending in 2009 as part of combating a $4.6 billion budget shortfall. And Nick points out that immediately before the state faced that shortfall, Dalton was a chairman of the powerful Senate budget committee. It is Dalton, Nick says, that is responsible for that big hole in education.

This claim is a bit harder to pin down.

McCrory has said that he would like to lower and/or eliminate income taxes and eliminate corporate income tax rates, but those are broad outlines.

His campaign says that it's unfair to claim that outline translates into a middle class tax increase. 

"Because Pat believes in reforming and modernizing a 1930s tax code with goals of reducing corporate and income taxes to provide tax relief to grow our economy does not in any way equate to a middle class tax hike. The only candidate who has campaigned for raising taxes in this election is an increasingly desperate Dalton," Nick said. In that quote, Nick is referring to the fact that Dalton supported a sales tax increase proposed by Gov. Bev Perdue this spring in order to head off education cuts. 

And maybe it isn't fair to call this a plan, given that the proposals haven't been finalized to the point of becoming even draft legislation.

But let's put all of this in a little perspective.

Of the $19.5 billion that rolled into the state's general operating fund last year, $10.3 billion came from personal income taxes. Another $1.1 billion came from the corporate income tax.

Sales taxes brought in $5.3 billion.

There is going to have to be a lot of widening and deepening of that sales tax base to fill an $11 billion hole.

Dalton's claim is that in order to make up for the loss of revenue by getting rid of corporate and income taxes, the tax burden would have to shift to sales taxes. Sales taxes are seen as regressive because they require poor and middle class people to spend a greater portion of their income when they buy things, even basic items such as clothes and food. 

In interviews, McCrory has said that he would like to see the state engage in natural gas exploration and fees and taxes levied in that arena would help offset taxes collected in other venues. There are questions and disagreements over this approach to energy, so it's not at all clear if that revenue could make up for the loss of other taxes. 

So is this claim accurate? Strictly speaking, no, because McCrory has not put out a tax plan specific enough to evaluate. However, the leaps made by this ad aren't crazy, and similar jumps in logic have been made by reporters evaluating McCrory's economic outline.