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Candidates scramble to respond to flurry of attack ads in Pennsylvania's campaign for governor

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HARRISBURG, Pennsylvania — A flurry of new TV ads has debuted in Pennsylvania's campaign for governor, sending candidates scrambling to counter the attacks as the spending and rhetoric ratchet up.

Over the weekend, Democrat Tom Wolf began airing a TV ad that insists his family company, the Wolf Organization, pays taxes in Pennsylvania.

It's a response to an ad begun last week by Republican Gov. Tom Corbett, who's seeking a second term in the Nov. 4 election. In that ad, Corbett's campaign criticizes Wolf's advocacy for various tax increases while he served as former Gov. Ed Rendell's revenue secretary and suggests Wolf's company avoided paying Pennsylvania taxes by incorporating in Delaware, a business tactic known as "the Delaware loophole."

"His company moved to Delaware to avoid paying the same taxes he forced us to pay," an actress in the ad tells viewers.

A Wolf campaign spokesman said the Wolf Organization, a privately held company chaired by Wolf, will not make any information available about its tax payments in Pennsylvania.

Michael Newsome, the Wolf Organization's chief financial officer and treasurer of the campaign, said Monday the company has never used the Delaware loophole.

Department of Revenue officials describe the loophole as an artificial payment — or a "sham transaction" — by one arm of a large, multistate company to another arm of the same company that is located in a lower-tax or no-tax state, like Delaware. The end result is to lower the amount of the company's profits that are taxable in Pennsylvania.

Previously, Wolf has said the Delaware Loophole is still used to shield corporate profits from state taxes and that he would do everything in his power to close it as an option for companies.

The Department of Revenue does not disclose information on individual taxpayers, making it difficult for anyone outside the agency to have a complete view of how many companies pay corporate net income taxes in Pennsylvania, or who pays what.

Meanwhile, on Monday, Lt. Gov. Jim Cawley held a news conference at the headquarters of the Pennsylvania Manufacturers' Association and said a TV ad aired by a coalition of the Democratic Governors Association and labor unions is lying about cuts in education aid under Corbett.

"I am calling on you, Tom Wolf, to take down this ad," Cawley said. "Call on them to take down this ad. Stand for truth in this campaign."

PA Families First, a coalition of the Democratic Governors Association and labor unions, began airing the ad last Tuesday. The ad accuses Corbett of cutting education aid, forcing school districts to lay off employees and raise property taxes while he refused to make the "oil and gas industry pay their fair share."

The Wolf Campaign showed no sign Monday that it would ask for the ad to be taken down and released a response that slammed Corbett on the same issues.

"His record is indefensible, and today was nothing more than a political stunt designed to distract from Gov. Corbett's failed leadership," spokesman Jeffrey Sheridan said in an email.

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