AD CHECK: McIntyre-Pantano continue debate on taxes

WILMINGTON, NC (WECT) - Congressman Mike McIntyre (D) issued a response Friday to a recent back and forth claim over tax increases with his opponent this November.

Wednesday, Republican Congressional Candidate Ilario Pantano started an advertisement on a claim from McIntyre (D) about taxes.

In the first ad that started airing over the weekend, McIntyre claimed Pantano would raise your taxes as much as 23% should he be elected to serve North Carolina's 7th Congressional District.  The advertisement lays out how much that would cost you for everything from gas to groceries and housing.

The claim pertains to Pantano's voiced approval for what's called the "Fair Tax."  That's a flat 23% tax across the board on what you buy and would replace other taxes in an effort to simplify the federal tax code.

Monday, we checked with UNCW Economist Woody Hall, who says it is possible this tax could raise your taxes depending on how much you plan to spend.

"If your income is below the median. The median is about $45,000 per household in the state of North Carolina -- Southeast North Carolina. It conceivably would raise your tax rate, raise your tax application. That's in the short run," Woody Hall said.  "Now there are obviously going to be some exceptions to it in the sense that certain criteria qualify for a reduced tax rate. There are also items that would not be taxed."

Hall says one way to guarantee your tax obligation is lower is to spend less.

Some proponents of the fair tax concept disagree with Hall and McIntyre.  They say the tax would be good for everyone because it eliminates all other taxes.  It would only tax things you buy and they point out that would include everyone -- even those skipping out on paying taxes now.

According to a analysis in 2007, "(the fair tax) will collect more money from those earning between $15,000 and $200,000 per year and less from those earning more than $200,000 per year. It is possible that the FairTax would make most people better off, but much of that gain would be a direct result of making the tax code less fair."

Wednesday, Pantano responded to McIntyre's claims with an ad that says he's the victim of a "smear attack."  Pantano's ad states McIntyre's statement that this is a 23% sales tax is a "pipe dream."  The Pantano campaign says this 23% tax is only added after the elimination of all other taxes, the dismantling of the IRS and the elimination of the estate tax, which some refer to as the death tax.  Pantano's camp went on to say McIntyre has voted three times in favor of keeping the estate tax.

McIntyre says Pantano is just wrong.

"We need to do all we can to protect small businesses and family farms, and I am 100% committed to ending the "death" tax!  Since my election to Congress, I have consistently supported this repeal. What my opponent does not tell you is that I voted for a motion to eliminate the estate tax during consideration of the estate tax relief bill in 2009. Unfortunately, this motion was defeated. I voted to extend the exemption for the 2009 estate tax for the time being because at that time, the estate tax was to be repealed for one year only.  When it became apparent that the repeal of the estate tax was not going to be successful, it was important to maintain the highest exemption possible," Congressman McIntyre stated in a written release.

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