Campaign ad from DeSantis PAC says Nikki Haley ‘raised taxes.’ That’s Mostly False.

Amy Sherman
·7 min read
2
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Fight Right Inc.

Statement: Nikki Haley “raised taxes.”

Republican presidential candidate Nikki Haley makes a campaign stop in Iowa earlier this month.
Republican presidential candidate Nikki Haley makes a campaign stop in Iowa earlier this month.

A political action committee supporting Florida Gov. Ron DeSantis in the Republican presidential primary aired a TV ad that tries to link a rival, former South Carolina Gov. Nikki Haley, to former Secretary of State Hillary Clinton.

The ad that aired in Iowa, by Fight Right Inc., opens with clips of Haley saying, "The reason I got into politics was because of Hillary Clinton." Then, a narrator says, "So, Haley raised taxes like Hillary."

It is not an apples-to-apples comparison because the two politicians oversaw different types of taxes; Haley is a former state legislator and governor, and Clinton is a former U.S. senator. But in this fact-check we will focus on the ad’s claim about Haley’s tax record.

The ad cites two tax proposals: one to raise South Carolina’s sales tax and another to raise the state’s gasoline tax.

‘"These were tax swaps, not tax increases," Jared Walczak, vice president of state projects at the Tax Foundation, a group educating the public about tax policy, told PolitiFact.

Haley’s sales tax increase was combined with property tax cut

The ad cites a 2006 bill Haley co-sponsored as a state House member. It was signed into law and raised the state’s sales tax by 1 penny while also cutting homeowners’ property taxes for school operations.

Sarah Young, a University of South Carolina, Aiken political scientist, said the measure was presented as a "tax swap." Media outlets reporting on the bill used the same term.

"In essence, this meant that most homeowners pay nothing in school operating taxes on their property tax bill" for a primary residence, Young told PolitiFact.

Ellen Saltzman, a Clemson University research associate, analyzed the legislation in 2006 and concluded that most homeowners would pay less overall in taxes under the bill. Writing for the Strom Thurmond Institute of Government & Public Affairs, a research group, Saltzman found that the estimated property tax relief would likely be greater than the additional sales tax homeowners would pay, although the effect would vary based on homeowners’ purchases, home prices and tax rates for local school operations.

Renters paid that sales tax increase but did not benefit from a property tax cut.

Because the property tax relief was limited to owner-occupied properties and excluded commercial real estate, including rental properties, "renters do not receive the benefit of the property tax relief," either directly through lower tax payments or indirectly through lower rent, Walczak said.

"Overall, the tax package was not a tax increase, … but the 2006 property tax relief package prioritized homeowners and thus shifted more of the burden to businesses and renters, since they did not receive property tax relief but still faced higher sales tax burdens," he said.

Some lawmakers and school officials objected to the bill from the outset, fearing it would remove a stable school funding base.

Years later, South Carolina journalists found that the tax swap slashed property taxes, but the 1 penny sales tax increase did not make up for the lost revenue for school districts.

Gov. Haley proposed a gas tax hike coupled with income tax cut

The campaign ad also cited a September Fox News article that said Haley as governor supported a 2016 state gasoline tax increase to pay for infrastructure. The article explained that Haley coupled her proposed gas tax increase with an income tax cut, lowering the top income bracket’s rate from 7% to 5% over a decade.

"I’m going to veto anything that is a net tax increase," Haley told reporters in January 2016. "I’m just not going to have it when you’ve got $1.3 billion in new money. I’m not going to do that to the taxpayers of this state."

Ultimately, such a proposal was not approved, NBC in Charleston reported in November 2016.

In 2015, when she proposed the same plan, Haley said she would sign a gas tax increase only if the state income tax was reduced. "If we do all of those things, we will have better roads and a stronger economic engine for our people. That’s a win-win."

A Haley campaign spokesperson sent us a 2015 article from the Post and Courier, a Charleston, South Carolina, newspaper. It said Grover Norquist, the president of Americans for Tax Reform, which asks politicians to oppose tax hikes, wrote a letter in 2015 to South Carolina state lawmakers urging them to support Haley’s plan.

Haley’s campaign spokesperson also sent articles showing that in 2014, Haley opposed a gas tax hike alone, saying there were other ways to increase infrastructure funding.

In 2017, the South Carolina Legislature voted to raise the gas tax while providing other tax relief, but that was after Haley’s governorship and during her time as former President Donald Trump’s United Nations ambassador.

When contacted for comment, a spokesperson for Fight Right Inc., the DeSantis PAC, pointed to minor tax measures Haley had supported that the ad did not cite and were not what most people would consider a broad tax increase. One example was a lodging tax on vacation rentals.

PolitiFact's ruling

A Fight Right Inc. ad said Haley "raised taxes."

The ad points to 2006 legislation Haley co-sponsored as a state legislator to raise the state sales tax by 1 penny while cutting homeowners’ property taxes. Experts and journalists called the measure a tax swap. And a university researcher’s analysis estimated that with the change, most homeowners would pay less overall in taxes.

People who don't own property saw a sales tax increase, but they did not benefit from the property tax cut.

The ad also cites Haley’s 2015 and 2016 proposals while governor to raise the gasoline tax. Again, it was not a stand-alone increase; it was coupled with an income tax cut. And the proposal didn’t pass, so taxes did not change.

The statement contains an element of truth, but it ignores critical facts that would give a different impression. We rate it Mostly False.

Our sources

This article originally appeared on Austin American-Statesman: PolitiFact: DeSantis PAC says Nikki Haley raised taxes. That's false.