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Reality Check: Ad Claims Olsen Favors Corporations Over Working Families

Published On: Jul 20 2011 05:24:30 AM CDT   Updated On: Jul 23 2011 11:10:23 AM CDT
MADISON, Wis. -

Recall elections are less than a month away, and many have probably noticed political ads on TV.

In Wisconsin's 14th Senate district, incumbent Republican state Sen. Luther Olsen is being challenged by Rep. Fred Clark, D-Baraboo, in a recall election.

A TV ad in the race claims that Olsen is responsible for shifting millions of dollars from working families to corporations. WISC-TV looked at the ad's claims in a "Reality Check."

For Democratic supporters, the ad crystallizes the main argument in the recall. It centers on Olsen's vote on the state budget. Many probably recognize is as the ad with the money bowl.

"Thanks to Sen. Luther Olsen's vote for Gov. (Scott) Walker's budget, families will pay more in taxes," the ad says.

WISC-TV found this claim misleading. The budget proposed by the governor and passed by the Legislature does not include a general tax increase, which means most families won't see taxes go up. But for some, there are deep cuts to the earned income tax credit and the homestead credit. Both of those are refundable tax credits to low-income families, some who make so little they don't pay income taxes. For about 270,000 getting the earned income tax credit it will mean they'll receive $200 to $500 less a year.

"But big corporations and the rich will get millions in tax breaks," the ad follows up.

WISC-TV found this needs clarification. The Legislature did pass bills and provisions in the budget aimed at helping businesses, with the biggest item going to manufacturers. One tax credit will cut their taxes gradually over four years from 7.9 percent to 0.4 percent, and cost the state $320 million over those four years. That's just for manufacturers -- not all companies, WISC-TV reported.

The group running the ad says cuts to capital gains taxes are the tax breaks for the rich.

About half of the tax break will go to the top 10 percent of wage-earners in Wisconsin, but the tax cut only applies if the money is re-invested in Wisconsin-based businesses.

"Olsen is making devastating cuts to our schools and health care programs, instead of asking those who can afford it to pay their fair share," the ad says.

WISC-TV found this also needs clarification. Olsen did vote for deep cuts to schools, to the tune of $800 million and $500 million in unspecified cuts to Medicaid.

Then the ad gets to the part about a "fair share," which is also mentioned earlier in the ad along with a number of specific people who are affected.

"To balance Wisconsin's budget, seniors, nurses, small business owners, firefighters and families are paying their fair share," the ad says.

We Are Wisconsin, a liberal group formed out of the collective bargaining protests and that is running the ad, claims those mentioned are contributing a "fair share" because they are affected by increased pension and health care contributions, and budget cuts.

But there are some exceptions, WISC-TV reported. University of Wisconsin Hospital nurses, as well as nurses working in state or public facilities would be affected, but not all nurses will pay increased contributions to pensions and health care.

The small business owner claim is the most questionable, WISC-TV reported. The "Main Street" program run by the Department of Commerce, which helps historic business districts in communities, was partially cut from $434,000 to $250,000, but that amount could grow if it's deemed successful by the new Wisconsin Economic Development Corporation. Either way, it affects a very small group of businesses, not every small business owner in the state, WISC-TV reported.

Does that mean all of these people's "fair share" is more than corporations? That's up for voters to decide. The recall election is on Aug. 9.

Send ideas for a "Reality Check," to realitycheck@channel3000.com.

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