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A Project of The Annenberg Public Policy Center

Distorting Perdue’s Position on Taxes

An outside group is claiming that Georgia Republican Senate candidate David Perdue called tax increases an “unavoidable reality,” but Perdue never made such a statement. Rather, Perdue remarked that he wants to increase revenues by growing the economy.

The misleading claim comes from a new TV ad being run in Atlanta, Georgia, by the Southern Conservatives Fund, a super PAC supporting Perdue’s primary opponent, Rep. Jack Kingston. The May 20 Republican Senate primary featured seven candidates, none of whom received a majority, forcing a July 22 runoff between the two highest vote-getters: Kingston, an 11-term congressman, and Perdue, a businessman who has never held elected office.

The ad begins with the image of someone holding a sign that reads, “Don’t tax me bro!” The narrator says, “Georgia conservatives are united against raising taxes. But not David Perdue. David Perdue called revenue increases an unavoidable reality.” Onscreen, a graphic states, “David Perdue: Tax Increases … Unavoidable Reality.”

The ad distorts remarks Perdue made in an hour-long meeting with the editorial board of The Telegraph, a newspaper in Macon, Georgia. While the ad attempts to equate “revenue increases” to “tax increases,” as the text on the screen states, Perdue’s comments pertained to growing the economy, and he never mentioned tax increases. Moreover, the phrase “unavoidable reality” is never used. In response to a question about whether economic recovery will be better achieved by curbing the growth of spending or increasing revenue, Perdue replies:

Perdue, May 12: If you go into a business, and I keep coming back to my background, it’s how I know how to relate is to refer back to it — I was never able to turn around a company just by cutting spending. You had to figure out a way to get revenue growing. And what I just said, there are five people in the U.S. Senate who understand what I just said. You know revenue is not something they think about.

Perdue then goes on to discuss growing the economy and his business experience growing companies, implying that “a way to get revenue growing” is through a growing economy, not raising taxes.

Perdue, May 12: You gotta get spending cuts and that’s where I would start. I think the second thing though is – some of these issues that I’ve talked about with getting the economy going are short term within three or four years you could get this thing booming.

Perdue’s position was further clarified in a statement released by Perdue campaign spokesman Derrick Dickey. The statement reads, in part, “David was stating a simple economic principle: If the economy is growing and more people were working, it generates more revenue. Tax increases hinder economic growth and destroy jobs.”

In a phone interview with FactCheck.org, Charles E. Richardson, a member of The Telegraph’s editorial board, who was present at the meeting with Perdue, said the candidate “wasn’t referring to taxes at all” in his statement regarding increasing revenues, but rather he was stating his desire to “grow the economy.” Furthermore, Perdue’s campaign website quotes the candidate as saying, “I will not support a tax increase of any kind.”

The ad also misleads viewers in its claim that Perdue stated “spending cuts weren’t enough” to grow the economy. The actual statement, taken in context, is referring to Perdue’s business past, not to the economy. He says, “I was never able to turn around a company just by cutting spending.”

The ad, however, is correct in its statement that Perdue expressed support for an Internet sales tax, and the ad is also correct in asserting that billions of dollars would be collected from the tax, according to estimates from the nonpartisan Congressional Budget Office.

Perdue expressed his support for an Internet sales tax, which would tax online sales in a similar fashion to brick-and-mortar sales, in a January debate before the state’s mayors. As the Morris News Service reported on Jan. 27, Perdue voiced his opinion that an online sales tax would “level the playing field” between online sales and traditional, brick-and-mortar sales.

Perdue, Jan. 27: Being the only retailer up here, I can tell you – I’ve seen both sides of this conversation. Look, one of the things the federal government does – or should do, frankly – is make sure all players in our free enterprise system play on an even playing field. Here’s where, because of technology, they’re not. Frankly, I think whether you have brick-and-mortar, or Internet sales, we should have the same rules apply to both. That’s from a retailer.

Perdue’s comments clearly indicate his support for an Internet sales tax, similar to one currently being debated in Congress. When FactCheck.org asked the Perdue campaign to clarify the candidate’s position, spokesman Derrick Dickey sent us the following response, citing Perdue’s support for a complete overhaul of the tax system in the form of the Fair Tax.

Dickey: He said he supported leveling the playing field, which is what the Fair Tax does. The Fair Tax eliminates the income tax and is revenue neutral. It is not considered a net tax increase.

The Fair Tax, which would replace existing federal income taxes with a national retail sales tax, has received little support in Congress. While Perdue says his Fair Tax plan would be revenue-neutral, some individuals would pay more, and others would pay less.

Meanwhile, the ad asserts that “Jack Kingston has never voted to raise taxes.” We could find no votes to contradict that. But by the standard the ad set for Perdue — simply expressing support rather than actually voting for a tax increase — Kingston also has supported raising taxes. In 2011, the Atlanta Journal-Constitution quoted Kingston as expressing his support for closing some tax loopholes, effectively increasing taxes on certain industries.

Atlanta Journal-Constitution, July 9, 2011: “If it’s a tax loophole that helps one industry to the detriment of others, I think we’d certainly want to close it,” Kingston said. “If it’s a wealthy individual and they’re skating on their taxes, nobody’s in favor of that.”

FactCheck.org reached out to Kingston for clarification on his stance regarding tax loopholes, and Kingston’s press assistant, Greg Dolan, told us that Kingston was “not discussing ‘raising revenue’ as a stand-alone or as a solution to our country’s debt problem,” and noted that Kingston, much like his opponent, “is a champion of the Fair Tax.”

Asked to defend the claim that Perdue supported revenue and tax increases, Southern Conservatives Fund’s Eric Johnson replied via email that “we said ‘revenue’ in the script.” The ad’s narrator only says “revenue,” but the graphics on the screen say, “David Perdue: Tax increases … Unavoidable Reality.” Moreover, the “revenue” claim is preceded by the statement, “Georgia conservatives are united against raising taxes” — leaving little doubt that the ad attempts to create the misleading impression that Perdue is proposing a tax increase.

— Alexander Nacht, with Robert Farley