Chris Murphy’s drastically out-financed bid for U.S. Senate is enjoying fresh reinforcements from the Democratic Senatorial Campaign Committee, which has committed $320,000 in advertising aimed at Murphy’s opponent, Linda McMahon.
What does this mean for voters? Well, this morning it meant not one, but two new attack ads on the airwaves. One is from the national committee; the other directly from Murphy. Both take on past targets, criticizing McMahon’s record as CEO of World Wrestling Entertainment as well as the details of her income tax plan. And both repeat statements likely to confuse viewers.
The ads open by attempting to chip away at McMahon’s public persona. “The image CEO Linda McMahon is selling isn’t real,” the DSCC ad proclaims. Says Murphy’s ad: “Meet the real Linda McMahon.”
And from there, the spots collectively make a variety of claims we’ve heard before about McMahon’s tenure at the top of WWE: That she laid off workers while receiving millions in tax credits, that workers at the company were denied retirement and health benefits, and, in Murphy’s ad, that McMahon “took home $46 million a year.”
Those are generally accurate statements. In 2009, WWE announced it would cut its global workforce by 10 percent. That same year, the company received $9.8 million in Connecticut tax credits under a program designed to attract film productions to the state.
WWE also treats its wrestling performers as independent contractors who do not receive long-term health or retirement benefits through the company. That decision is the subject of legitimate debate, with the company claiming its performers are well-compensated and can afford their own insurance, and detractors saying the company exhibits sufficient control over the work performed by the wrestlers that they are legally entitled to the benefits and protections of full-time employees. While the DSCC ad makes a reference to “wrestlers,” Murphy’s ad is vague, indicating that benefits are denied to “workers,” without being more specific. According to SEC records, WWE does provide health and retirement benefits for all of its on-staff full-time employees. But while the term “workers” is overly broad, most viewers are by now likely aware that the dispute over benefits is related solely to WWE’s wrestlers.
Lastly, the $46 million figure is (as we wrote when this issue came up two years ago) a fair figure to cite for 2009 – with an asterisk. That number does not represent McMahon’s salary that year, but rather the approximate value of dividends WWE paid in 2009 to holders of “Class B” shares – all of which are owned or controlled by members of the McMahon family. In addition, not all of that dividend money flowed directly to McMahon. But counting just shares controlled by McMahon or her husband, the number was probably still more than $40 million. (That number has since fallen, to $29.6 million in 2010, and $23.3 million last year, according to the McMahons’ tax returns.)
Where the ads get into trouble is in their description of the impact of McMahon’s proposal for federal income-tax rates. Repeating a confusing approach that the McMahon campaign has employed as well, these ads assert that McMahon’s plan would give her a sizable “tax cut” without explaining that the figure is not based on how much McMahon’s taxes would drop compared to what she is currently paying. Instead, as we’ve written multiple times before, the campaigns are comparing McMahon’s plan to the taxes that would be due if the Bush-era tax cuts are permitted to expire and tax rates jump. Calling that a tax “cut” – particularly without explaining the basis for the calculation – is misleading.
In the absence of an explanation, most viewers are likely to understand a tax cut to refer to a reduction in a taxpayer’s current liability. Under that definition, McMahon’s plan would cut her taxes by perhaps $10,000 to $15,000 – a far cry from $7 million. (The gap is so large because nearly all of the McMahons’ income is from dividends, which are currently taxed at 15 percent. If the tax cuts were to expire, dividends would be taxed at a maximum rate of 39.6 percent.)
Murphy’s ad goes on to declare that McMahon would be in line for a huge tax cut under her plan, “while the middle class pays more.”
The logical inference is that middle-class taxpayers will pay more under McMahon’s tax plan, but that is not the case. The Murphy campaign says that language was not intended to imply that middle-class taxes would rise under McMahon’s plan, but rather that under her overall budget and tax proposal, services important to the middle class would likely be cut, leading to higher expenses for the middle earners. But the ad includes a frame that reads: “McMahon’s Tax Plan” and “Middle class pays more.” That juxtaposition, combined with the narrator’s declaration that “McMahon’s tax plan gives her a $7 million tax cut, while Connecticut’s middle class pays more,” naturally leaves the impression that middle-class taxes would increase under McMahon’s plan.
The Democrats’ criticism related to the WWE has a reasonable foundation. But the ads’ treatment of McMahon’s tax plan is off-base – even if part of it is no more off-base than their opponent’s treatment of the plan. So overall, we rate these ads “Somewhat Misleading.”
Democratic Senatorial Campaign Committee’s ad