Fact Checker

A case of mistaken assumptions about Deeds and taxes

Earlier this month, the GOP launched two television ads claiming that Democratic gubernatorial candidate R. Creigh Deeds's support for a statewide gas tax and federal cap-and-trade legislation would result in $7,800 in additional taxes per Virginia family every four years.

Deeds (D-Bath) has fired back, debuting his own ad in southwest Virginia that calls on Republican opponent Robert F. McDonnell to "knock off the lies."

McDonnell's $7,800 figure in the ads was based primarily on two assumptions. The first: that Deeds would support a 20-cent-per-gallon state gas tax to raise the$1 billion he has said is needed for road and transit improvements. Deeds has yet to support such an increase.

To reach $1 billion, the state would likely have to increase its 17.5-cent-per-gallon gas tax to about 20 cents per gallon. Deeds has vowed to appoint a bipartisan commission to find a "dedicated funding mechanism for transportation -- even if it includes new taxes." So it's unclear whether Deeds would end up supporting such an increase. But some gas tax increase could be on the table, said Mike Gehrke, a campaign spokesman.

The second assumption is that Deeds supports the cap-and-trade bill pending in Congress to tackle greenhouse gas emissions. Deeds has supported efforts to reduce global warming. But he has said repeatedly that he has opposed the bill passed by the House earlier this year because of a measure to increase utility costs.

McDonnell's camp pulls $6,800 of the supposed tax tab from a U.S. Treasury Department memo on federal cap-and-trade legislation, which said the annual impact on families would be $1,761. Multiply that by four years and, voila!, you get $7,044.

Problem is, that figure comes from a simplistic calculation of the maximum revenue the federal government could get from cap-and-trade.

A more plausible figure, provided by the Congressional Budget Office, is a cut in a household's purchasing power of $90 by 2012.