Ad says Joni Ernst pledged to protect tax breaks for companies that outsource

It’s back! A claim out of the Democratic Party that numerous fact-checkers debunked in 2010 has made its way to the 2014 Iowa Senate race.

A new ad attacks Republican candidate Joni Ernst, painting her as beholden to special interest groups because she signed a pledge. The ad comes from NextGen Climate Action Committee, a liberal political action committee.

The ad shows a dimly lit room, with two men looking at a picture of Sen. Ted Cruz, R-Texas, on a screen, while laughing in a slow, almost crazed manner. The screen switches to a picture of Ernst.

"We got her to pledge? Joni signed on the line," the ad says. "The tax breaks that thing protects are gold. Green light more outsourcing! China, Mexico. All the way."

Text on the screen says, "Ernst’s Pledge: Protects Tax Breaks for Companies that Ship Jobs Overseas."

Even though the ad is new, this claim -- that a person who signs the Americans for Tax Reform’s pledge is in favor of tax breaks that encourage outsourcing -- is not.

In 2010, PolitiFact Virginia checked a similar statement, that a state legislature candidate "supports the tax loopholes that send American jobs overseas." They rated the claim False.

The same year, our friends at Factcheck.org found the claim, used against a Republican House candidate from Hawaii, to be false. And they pointed out that pro-Democratic groups that used the attack ads in quite a number of ads. The Associated Press also said the claim was wrong in 2010.

It seems like there’s a consensus that the claim is off-target, but because it’s been four years, we decided to look at it again.

What’s this pledge?

The pledge that the ad is talking about the Taxpayer Protection Pledge -- crafted by Americans for Tax Reform, Grover Norquist’s anti-tax group, in 1986. Lawmakers who sign it pledge to fight tax increases. Ernst signed the federal pledge back in July 2013.

Democrats say this means Ernst and other signers pledge to protect tax breaks for companies that ship jobs overseas. That’s a stretch.

For one, the text of the pledge is brief and does not take positions on specific issues, like protecting companies with employees in other countries. It says nothing about jobs or changing tax code.

It says:

I, ______, pledge to the taxpayers of the ______ district of the state of ______ and to the American people that I will:

One, oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses; and

Two, oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.

Democrats have said Americans for Tax Reform has pressured signers to vote in ways that would prevent closing tax benefits for companies that conduct business overseas.

NextGen Climate pointed us to Americans for Tax Reform’s stance on a bill that provided $26 billion in aid to states and localities.

Featured Fact-check

Richard Shelby

stated on March 25, 2010 in a letter to Treasury Secretary Timothy Geithner

"The bill reported out of committee sets up a $50 billion slush fund that, while intended for resolving failing firms, is available for virtually any purpose that the treasury secretary sees fit."

In August 2010, Americans for Tax Reform said the bill (H.R. 1586, which passed) violated the Taxpayer Protection Pledge. The bill included increased spending that would be paid for in part by closing tax loopholes for American companies that do business overseas. The changes didn’t specifically address workers or where employees are located.

NextGen Climate is essentially arguing that because Americans for Tax Reform told pledge signers not to vote for this bill all pledge signers support outsourcing protections.

We see two primary issues with this evidence.

First, Americans for Tax Reform’s main problem with the bill is that it eliminated a tax credit without finding another avenue to reduce taxes by the same amount, which the pledge requires.

People who sign the pledge wouldn’t support any tax increase or tax credit elimination, no matter the context, so it is misleading to tie their tax positions to other issues like outsourcing, said Eric Toder, co-director of the Urban-Brookings Tax Policy Center, a think tank.

"They wouldn’t close a (tax) subsidy to bring jobs home, either," Toder said.

In theory, signers could have voted for the 2010 bill if it had eliminated other taxes to make up for closing the loopholes.

Second, this particular vote happened in 2010, almost three years before Ernst signed the pledge, and she was not in an elected position at the time -- let alone in a position in which she would have voted on this bill. She has no ties to this legislation.

Our ruling

An ad by NextGen Climate Action Committee said Ernst signed a pledge that "protects tax breaks for companies that ship jobs overseas."

Ernst signed the Taxpayer Protection pledge, a promise promoted by Americans for Tax Reform, which is a broad vow to oppose all tax increases. It does not specify protecting tax loopholes for companies that have employees overseas. In one instance, Americans for Tax Reform urged signers to vote against a bill that closed one of these loopholes, but the decision was more about stopping a tax increase than protecting outsourcing, and Ernst had yet to sign the pledge then, anyway.

We rate this claim False.