HAGERSTOWN, Maryland — Neil Parrott admits he was “very surprised” to find himself accused of supporting “tax breaks for corporations that send jobs overseas.” The attack, he says, “came out of nowhere.”

Although the shipping-jobs-overseas accusation has become a standard-issue smear against Republican congressional candidates this year, its application in this case is particularly surprising, because Parrott isn’t a candidate for Congress. He’s a local businessman running for a seat in the Maryland state legislature, and utterly mystified by the claim his Democratic opponent makes in a slick four-color mailing sent to thousands of Washington County homes last week. The mailing depicts Parrott in front of a map of Mexico and urges voters, “Vote NO on Neil Parrot — BAD for JOBS, BAD for US.” Adding to the xenophobic tone, the Democrat’s mailer calls Parrott an “outsider” and says he “isn’t from Washington County,” although the Republican is a lifelong Maryland resident who lives in Hagerstown — which is in Washington County — where he owns a highway engineering company.

Never mind the facts. It’s an election year, and Democrats desperate to distract voters from their own party’s policy failures aren’t going to let truth stand in their way, so that a small business owner running for a state legislature seat is portrayed as an “outsider” pursuing a hidden agenda behalf of a “Washington D.C. special interest.”

That “special interest” would be Americans for Tax Reform, and the not-so-hidden agenda is ATR’s “Taxpayer Protection Pledge.” Since 1986, when it was introduced with an endorsement from Ronald Reagan, this promise to “oppose and vote against any and all efforts to increase taxes” has been signed by thousands of candidates for public office. The list of state-level candidates who signed the ATR pledge for 2010 is eight pages long, including more than 50 candidates in Maryland besides Parrott.

The ATR pledge is a non-partisan promise and some Democrats have signed it, but for months, the pledge has been fodder for Democratic Party attacks on GOP candidates, conveying the impression that Republicans are running for office with no goal more important than shipping jobs to China and Mexico. When the Democratic Congressional Campaign Committee (DCCC) employed this charge in April against Charles Dijou in a Hawaii special election, the group FactCheck.org labeled it flatly “false.”

This accusation dates back at least to 2004, when John Kerry raised it repeatedly against President Bush. Because the United States has a relatively high corporate tax rate, the Internal Revenue code has for several decades included a “loophole” that protects U.S.-based multinational companies from being taxed on profits earned by overseas operations. The sensible solution, of course, would be to remove the need for the “loophole” by reducing corporate tax rates. Instead, after Democrats took control of Congress in 2006, Texas Democrat Rep. Lloyd Doggett attached to a House farm bill a measure that amounted to a tax increase of more than $7 billion on U.S. companies that do business overseas. President Bush threatened a veto and the Democrat-controlled Senate stripped the measure from the farm bill.

Amidst that 2007 controversy, ATR issued a “legislative alert” informing members of Congress that a vote in favor of the Doggett amendment would be considered a violation of the Taxpayer Protection Pledge. Such is the pretext for the ridiculously misleading accusation that any candidate who has signed the no-tax-increase pledge is in favor of “outsourcing jobs… to foreign countries,” as the mailer against Parrott phrases it. This protectionist rhetoric was promoted as the Democrats’ last best hope for political survival in an Oct. 6 memo from strategists James Carville and Stanley Greenberg, and is now part of a predictable arsenal of attack ads against Republicans.

When Democrats aren’t twisting tax policy into dishonest attack ads, they’re dumping their opposition-research files into TV spots that usually combine allegations of impropriety with a large dose of class warfare. In New York’s 24th District, for example, Democrat Rep. Michael Arcuri portrays GOP challenger Richard Hanna as a greedy millionaire who “got rich while his construction company overcharged taxpayers thousands, was sued three times for injuries caused by faulty construction and was cited 12 times for health and safety violations.”

Lawsuits and citations are normal hazards of doing business in a litigious and over-regulated society, problems that arguably contribute far more to U.S. job losses than the tax “loopholes” that Democrats cynically demagogue. But the logic of these personal attacks is obvious: It turns the GOP candidate’s real-world business experience from an asset to a liability. If that kind of tactic succeeds against businessmen like Hanna, it will mean the playing field is tilted to favor politicians like Arcuri, a lawyer who has been drawing a government paycheck since being elected a local district attorney in 1993.

One reason Democrats might think they can succeed with these deceptive ads is that the establishment press seems content to repeat Democratic Party talking points without critical examination. In New York’s 25th District, for example, Republican challenger Ann Marie Buerkle held a press conference Monday to rebut attack ads from Democrat Rep. Dan Maffei. The local newspaper — which “couldn’t be more biased if they tried,” as one Syracuse-area blogger said — ignored the press conference and instead published an editorial that repeated the “outsourcing jobs to China” smear, while also accusing Buerkle of benefitting from “secret money.”

Ah, yes, secret money! President Obama and his allies have been pushing the “secret foreign donors” angle against those evil Republicans (who, we are assured by the president, are also beholden to the Slurpee cartel). Even a liberal like Ezra Klein recognizes this conspiracy-theory stuff as ineffective. Among the organizations implausibly accused of furtively funneling foreign funds to the GOP is the U.S. Chamber of Commerce. That could offer attack-ad fodder for Parrott, whose Democratic opponent is chief executive of the Washington County Chamber of Commerce. Is the Democrat a puppet for shady foreign interests? “That’s something I might want to look into,” says Parrott, laughing.

Republicans can laugh at these attacks, but it is a sad irony that, even while Obama accuses voters of succumbing to fear, his own party shamelessly tries to exploit fear in its mid-term campaign. Americans appear ready to reject these desperation tactics and Democrats risk losing nearly 100 House seats Nov. 2. The time for fear is over. Let the loathing begin.