Thursday, October 23rd, 2014

Ted Cruz re-defends a flamed claim

Ted Cruz speaks in August 2011 (American-Statesman photo, Jay Janner).
Ted Cruz speaks in August 2011 (American-Statesman photo, Jay Janner).

Ted Cruz, among Texas Republicans seeking his party’s nomination to succeed Kay Bailey Hutchison, sounded off Feb. 14, 2012, on our latest check of his veracity, urging supporters to take a closer look.

In an email blast and related blog post, Cruz takes issue with our Pants on Fire rating of his claim that Lt. Gov. David Dewhurst, another Republican Senate aspirant, has a record of promoting an income tax.

Dewhurst has no such record; there’s scant evidence he ever edged in that direction. See our full look into this here.

In his blog post, Cruz singles out two "facts:"

--First, Cruz writes, Dewhurst "proposed a business income tax." That is incorrect. Cruz ties this claim to a Dewhurst comment reported by the Associated Press in March 2006 that he would prefer that businesses facing the state’s about-to-be revised franchise tax pony up only if they make a profit -- a position he backed off a day later. Cruz never provided evidence of a Dewhurst income tax proposal nor did we find any.

--Second, Cruz says, Dewhurst "supported a ‘wage tax’ or ‘payroll tax.’" Dewhurst was presiding over the Senate in 2005 when that body sent the House an overhaul of the business franchise tax including payroll tax elements. No such plan advanced into law. At the time, sideline critics called the payroll tax feature a back-door income tax, though other close observers told us that was not the prevailing view and out-of-state tax experts told us they would not define payroll tax plans as income taxes.

Cruz’s blog post also says the Austin American-Statesman, which is home to PolitiFact Texas, has "long advocated a state income tax in Texas."

We presume he was referring to the newspaper’s editorial page, which operates separately (independently)  from the newsroom. Still, is Cruz right about the paper’s position? A quick check of our electronic archives showed that as long ago as 1989, which is as far back as the archive goes, the newspaper editorialized in favor of legislators considering a state personal or corporate income tax. An April 23, 1989, editorial states: "Generally speaking, the Legislature has done a good job this (legislative) session in dealing with the business at hand. But the inadequate (state) revenue stream has to be dealt with, and the sooner the better. Legislators should come to the next regular session prepared to diversify the state government's sources of revenue, not ruling out even corporate and personal income taxes."