Fact Check: Did Tillis give tax breaks to yacht owners?
Several ads aired by Democratic groups have claimed that state House Speaker Thom Tillis, the Republican U.S. Senate candidate, engineered tax breaks for the owners of boats and planes. This claim is not exactly seaworthy.Posted — Updated
Tillis, a Republican, is running to unseat first-term Democratic Sen. Kay Hagan. North Carolina's U.S. Senate campaign is already the subject of millions of dollars in television spending by non-candidate groups on both sides of the political divide.
Democrats have been working hard to paint Tillis as an advocate for legislation that favors the wealthy over ordinary North Carolinians, and this "yachts and jets" claims fits right in with that message.
A recent Senate Majority PAC ad, for example, criticizes Tillis for how the GOP-led General Assembly dealt with education funding and then adds, "Meanwhile, Tillis gives tax breaks for yacht and private jet owners."
The most colorful ad playing on the claim this summer is also by is also by Senate Majority PAC. It features a teacher leading a troop of schoolchildren to a marina, where they ask to use a boat since the school's classrooms are too crowded. In the Democratic Senatorial Campaign Committee's latest ad, an obviously well-heeled young woman carrying a large red purse and trailed by two security goons boards a private plane as the anchor says that Tillis has been "giving tax breaks to yacht and jet owners."
While it's certainly attention-grabbing, this ocean-going tale has a few leaks.
The 2013 tax reform bill neither raised nor lowered the cap on the sales tax charged for boats and planes. But the case made by those using the yachts and jets claims is that, by failing to get rid of the loophole in the 2013 tax reform bill, the General Assembly generally, and Tillis in particular, is responsible for keeping it.
Howard was one of the lead authors of tax reform legislation in the House and called the 2013 bill "a big lift" that couldn't get to everything.
Interviewed this week, Rucho said there are a number of loopholes that the 2013 legislation didn't close, but both he and Howard said another tax reform package would be put together in 2015.
"That will be in our next phase as we continue to lower the personal income tax rate," Rucho said of the plane and boat exemption.
Despite being critical of House leaders and the governor during the 2013 tax reform effort, Rucho declined to pin the yacht and jet exemption on Tillis.
"To say that Tillis did that is totally wrong," he said.
The difference, of course, is that far more residents are buying new and used cars to get to work and take their children to school every day than million-dollar boats or multimillion-dollar Cessna Citation jets.
Tillis' campaign, of course, has a different take.
"This is yet another completely meritless and incredibly hypocritical attack against Thom from Kay Hagan’s liberal special interest allies," said Tillis spokesman Daniel Keylin, who points out that Hagan served as a high-ranking lawmaker while the tax break was in place.
"They conveniently neglect to mention that, as chief budget writer, Hagan retained the cap at the same time she was busy raising taxes on middle-class North Carolina families," Keylin continued.
Two members of our panel took the view that, if the legislature was in the business of reforming the entire tax code, it's not misleading to suggest there was an opportunity to take up the yachts and jets loophole. This viewpoint empathizes with the notion that those buying planes and boats are purchasing something beyond basic transportation and might well be able to chip in more toward education, which is the case made in the commercials.
But stronger sentiments were put forward that Democrats are trying to say Tillis, or at least the legislature that he led, did something that he did not do. This view holds that one cannot give a tax break that somebody already has had for more than 20 years. In other words, if this conversation were happening outside of a political context, it would clearly be wrong to say that Tillis or the General Assembly "gave" the tax break in 2013. Also lacking is any evidence that Tillis personally advocated one way or the other on this particular tax break.
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