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Angie Drobnic Holan
By Angie Drobnic Holan March 4, 2011

Wisconsin ad says workers get pay taken away but major corporations get tax breaks

Democratic groups have released a TV ad saying that Republicans in Wisconsin are waging war on the middle class by taking money from workers and giving tax breaks to corporations. The ad features workers speaking directly into the camera.

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Two workers explain how much money will be taken out of their paychecks when they have to make additional payments to pension funds and for health insurance. One says it will cost his family $400 to $500 a month in lost income; another says she’ll lose $3,000 a year from her paycheck.

"Money is being taken away from workers, and the tax breaks given to major corporations,"  says another worker in the ad. We decided to fact-check that claim.

The ad is from the Progressive Change Campaign Committee and Democracy for America. Both are liberal political advocacy groups; Democracy for America was founded by former Democratic National Committee chairman Howard Dean.

First, we’ll check whether money is being taken away from workers.

Gov. Scott Walker has asked state employees to contribute 5.8 percent of their pay toward pensions and pay at least 12 percent of their health insurance premiums.

This means that workers’ overall compensation will be be lower. The estimates PolitiFact Wisconsin reviewed indicate that the changes will vary depending on each worker's particular circumstances, but that most workers would lose between 6.8 percent and 11 percent of their paychecks.

So the claim that money is being taken away from workers is true.

We should note here that union leaders in Wisconsin have said they would accept the reductions in pay. But they don’t want to accept Walker’s proposal to permanently curtail the unions’ collective bargaining rights.

Next, we’ll check whether tax breaks are being "given to major corporations."

We found Walker has already signed bills that cut taxes for corporations and other businesses, depending on the number of jobs they create.

Walker signed a law on Jan. 31 that said that companies that relocate to Wisconsin will not have to pay corporate taxes for two years. The law stipulates that the company must move at least 51 percent of the workers on its payroll or at least those who account for $200,000 in wages. Walker also signed into law a bill that gives small tax breaks to companies that create jobs.

Walker proposed additional tax breaks for business during the campaign for governor. PolitiFact Wisconsin documented those promises on PolitiFact’s Walk-O-Meter, a database of Walker’s campaign promises. That includes reducing taxes on employers and repealing the "combined reporting" requirement for business taxes, a measure that increased tax revenues and was approved in 2009.

We’re ruling on the statement, "Money is being taken away from workers, and the tax breaks given to major corporations. "  Money is indeed being taken away from workers who will see lower overall compensation, and particularly smaller paychecks. Also, companies that employ significant numbers of workers are getting tax breaks. But the tax breaks signed into law so far are linked to job creation, not simply whether the company is a major corporation or not. Tax breaks are being given to business in the midst of a budget crisis, though. So we rate this statement Mostly True.

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Wisconsin ad says workers get pay taken away but major corporations get tax breaks

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