The Washington PostDemocracy Dies in Darkness

Democrats claim the Koch brothers want to ‘protect tax cuts for companies that ship our jobs overseas’

Senate candidate Bill Cassidy (R-La.) was the target of this ad. It was was paid for by Majority PAC, a super PAC supporting Democratic Senate candidates. (Video: Majority PAC via YouTube)

“Out-of-state billionaires spending millions to rig the system and elect Bill Cassidy. Their goal: Another politician bought and paid for. Their agenda: Protect tax cuts for companies that ship our jobs overseas. Cut Social Security and end Medicare as we know it. They even tried to kill relief for hurricane victims. Cassidy’s billion-dollar backers: They’ve got a plan for him. It’s not good for Louisiana.”

— voiceover for new ad sponsored by the Senate Majority PAC, attacking GOP Senate candidate Bill Cassidy

The pro-GOP group Americans for Prosperity has relentlessly attacked Sen. Mary Landrieu (D-La.), so the pro-Democratic group Senate Majority PAC has made AFP’s main backers, the Koch brothers, the subject of a new attack ad. This is all part of a larger Democratic strategy of tying GOP candidates to the conservative billionaires, as witnessed by Senate Majority Leader Harry Reid’s near-daily attacks on them.

A number of the claims in the ad we have covered before, such as the hyperbolic charge that Republicans want to “end Medicare.” The so-called Social Security cuts stem in part from changing the formula for indexing benefits to inflation — something also supported by President Obama. And AFP did not oppose hurricane relief; it opposed a version that it believed was fiscally irresponsible. (Moreover, this mostly had to do with money for Hurricane Sandy, which didn’t even come close to Louisiana.)

For the purpose of this fact check, we will examine the claim that the Koch brothers have an agenda of protecting “tax cuts for companies that ship our jobs overseas.” That’s a new one.

The Facts

Oddly, this ad cites virtually no sources, except for the claim that the Koch brothers are spending millions on negative ads. But spokesman Ty Matsdorf supplied us with the group’s documentation.

Essentially, the group’s claim is based on the equivalent of a complex bank shot in pool. See if you can follow the ball.

In 2012, in a procedural vote, Senate Republicans blocked a bill called the Bring Jobs Home Act, which would have created a new tax credit for companies that return jobs to the United States. It also would have eliminated a standard corporate deduction for moving expenses if those expenses turned out to stem from moving jobs overseas. Somehow, in the ad, this is wrongly translated into “tax cuts” for sending jobs overseas. But let’s put that to the side for the moment.

Meanwhile, the well-known Republican group, Americans for Tax Reform, in 2012 received $350,000 for its 501(c)(4) nonprofit arm from the Center to Protect Patient Rights, a group that dispenses political funds on behalf of the Koch brothers.

That same year, ATR raised $30.9 million for its 501(c)(4). In other words, the Koch contribution was about 1 percent — a pittance in that year. (Matsdorf notes that in 2010, about 30 percent of the ATR revenue came from Koch entities, but the vote in question was in 2012.)

Matsdorf also pointed to a Washington Post article and graphic that depicted ATR as part of a “Koch network.” But the group is located on the fringes of that network, along with other Republican-leaning groups such as the U.S. Chamber of Commerce, as “outside allies.”

In any case, what does ATR have to do with the Bring Jobs Home Act? Matsdorf cites the fact that ATR has a taxpayer pledge for candidates to “oppose any and all tax increases” and that ATR once ran a fact check blog post on an Obama speech that said that “companies don’t get tax breaks for moving anything overseas.” (One can argue over semantics, but Obama has a tendency to suggest this is a special loophole. Instead, it’s a standard moving expense deduction that is part of the tax code, whether you are moving jobs to Vienna, Va., or Vienna, Austria.)

But we could find no evidence that ATR ever took a position on this bill, which after all is supposedly the reason that Senate Majority PAC says saving this “tax cut” is a central part of the Koch agenda. Indeed, Ryan Ellis, ATR’s policy director, told The Fact Checker: “I’ve never heard of that bill, so I can tell you with some confidence that we don’t have a position on it.”

Americans for Prosperity does have a position on international business taxation, arguing for reducing the cost of sending capital to the United States. “When our tax rates are competitive, companies won’t be incentivized to leave the country with valuable jobs,” spokesman Levi Russell said.

“We advocate for a tax system that does not have carve-outs for anyone — a direct contrast to the assertion in the ad,” said Melissa Cohlmia, a spokeswoman for Koch Industries. She added that the company has never lobbied on moving deductions.

The Pinocchio Test

Upon examination, this claim crumbles into dust. The ad not only mischaracterizes an ordinary tax deduction as a special “tax cut” but then it falsely asserts that “protecting” this tax break is part of the Koch agenda. It turns out this claim is based on a tenuous link to an organization that never even took a position on the legislation in question.

We often have been critical of AFP ads, and we realize Democrats want to fight back against an onslaught of attacks. But if you want to join a gun fight, don’t fire blanks.

Four Pinocchios

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