October 16th, 2008
12:00 PM ET
13 years ago

Fact check: Plumber Joe's taxes

[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2008/images/10/16/art.joe.cnn.jpg caption="How would Obama's tax plan actually affect Joe's taxes."]McCain has entrepreneurs spooked about widespread tax hikes, but fewer than 2% of small-business owners would pay more under Obama's plan.

(CNNMoney.com) - In speech after speech, presidential candidate John McCain hammers on the claim that his rival Barack Obama will raise taxes on many small businesses.

At the debate on Wednesday night, McCain said, "The small businesses that we're talking about would receive an increase in their taxes right now."

More typically he has said: "What [Obama] hasn't told you is that he would tax half of the income of small businesses in America," a line used in La Crosse, Wisc., last week.

Should small business owners fear for their wallets if Obama is elected? Not the vast majority, business and tax experts say.

To make its claim, according to a McCain spokesman, the campaign counts as a small-business owner any taxpayer who files a Schedule C, E or F – the forms used to report gains and losses from business ventures and farms.

Using that definition and citing IRS data, the campaign notes that "56.8% of total small business income is earned by businesses in the top two rates, which Barack Obama has pledged to raise."

It's true that Obama has proposed raising taxes on the top two income rates.

But there are three main problems with McCain's charge.

Full story from CNNMoney.com

soundoff (517 Responses)
  1. TK

    YOU MEAN SPIRTED PEOPLE!

    How DARE you turn on this poor guy and start saying horrible crap about him. HE wasn't in the debate!
    Do you really alll HATE John McCain SO much that you will turn your evil words on an average american citizen??????

    What is WRONG with you people? SHAME!

    My husband's business' GROSS revenue is near $500k and the net profit is S**T. We are struggling along with everyone else. So stop whining and asking for handouts. Socialism is NOT the answer

    October 16, 2008 04:18 pm at 4:18 pm |
  2. Tony

    SAY IT AIN'T SO JOE!

    WHAT A LOSER, JUST LIKE HIS PAL MCCAIN!

    October 16, 2008 04:19 pm at 4:19 pm |
  3. Litabit in Hawaii

    Every time McCain & Palin pull a stunt against Obama & Biden they use good old Joe's name like Joe the Plumber and Joe SixPack. What's up with that?? He is to old to run, should retire already all his tactics are old like him and for Palin ( the hater) she should go back to Alaska and be impeached!! Let the votes decide... GO OBAMA,

    October 16, 2008 04:23 pm at 4:23 pm |
  4. Tim

    Joe the plumber's own words were that he is not hurt by Obama's tax plan right now. So he is will get the benefits of Obama's plan and be hurt by John McCain's right now. Old Joe the Plumber was speaking hypothetically when he was talking to Obama. So McCain’s claim that Joe would be hurt by Obama is false!!!

    Also, poor Joe the Plumber. He may have opened mouth and inserted foot. Not only was he exaggerating about the business he wanted to buy for $250K (which consists of him and the owner Al Newell), but Joe isn't even licensed to do the plumbing work he is doing. So he and the owner may be in hot water for his attempt at 15 minutes of fame.

    October 16, 2008 04:24 pm at 4:24 pm |
  5. Floe

    Honestly I have not heard one straight answer from either candidate? If they were taking an exam they would both fail as the area where their answers should be written would have no words and just a single winding circle that never ends. The language that they speak is called "politician"! Do you really think that cutting taxes will cure anything? It's just going to make one payment less and another payment larger, remember??? A freeze on tax is a good idea this way NOTHING GOES UP, a freeze/cutback on government spending and perks will OPEN FUNDS FOR NEEDED FOR RESEARCH ON CURES & ENERGY EFFICEINT PROGRAMS ETC. Health care should be competitive over state lines and health care costs such as prescription, hospitalization, doctor fees etc....should have limits that are reasonable & affordable (not a weeks salary for one visit???). There are health care plans available based on income. Alternate energy exsists it always has they should allow it to be available to the public and stop playing hide & seek with it. You want this economy to grow then start labeling items "MADE IN U.S.A." open those long gone factory positions. Get textiles back, lets make our own energy efficient automobile Americans are talented, inventive and we are not affaid of hard work, we enjoy it!!!! It's what made this NATION PROUD it's what made this NATION STRONG it is what UNITED US!!!

    October 16, 2008 04:26 pm at 4:26 pm |
  6. Vegas

    Dealt, Portugal

    Currently they pay 35%...

    So if you make 250K per year... you pay 87,000 dollars per year in income tax. That doesn't count payroll, Social Security, 401K, unemployment and everything else his buisness has to pay. All that and he more than likely has one or two employees whos wage he pays.

    So how is it he's getting off scott free?

    October 16, 2008 04:28 pm at 4:28 pm |
  7. Suzanne Byars

    Obama said "spread the wealth." Working people are tired of their tax dollars paying for others to sit at home and draw checks. Head Start is basically a free babying sitting service and Obama wants the taxpayers to start providing that care at birth. Go visit them. The lack of parenting is a major problem in the school systems not the teachers. Spending more money will not make the schools better. Holding parents responsible and accountable for their childen's behaviors, study habits and work ethics would bring improvement in the educational system. Giving people more money just enables and encourages them to continue to be dependent on the government. It has become a life style. America is on the road to becoming a socialist nation. Government health and spreading the wealth are two examples Obama wants to start. What would CNN report if a porn movie was being made with an Obama look-a-like? Maybe someone will and write a cartoon about his family.

    October 16, 2008 04:29 pm at 4:29 pm |
  8. Chris, Maui

    To take it one step further beyond this what he said/she said about Joe the Plumber, does America really want a president who has attempted to lie and smear his way into office?

    McCain is grasping at straws, anything to help his campaign, except for what America needs. An honorable president. America is already hated enough and the ditch has been dug. Let's climb our way out.

    Obama for President

    October 16, 2008 04:30 pm at 4:30 pm |
  9. Brent

    Obama's argument is foolish. For starters, most small business owners are striving to become mid-large business owners. That IS the American dream! But Obama wants to punish them for moving up the ladder and spread their wealth around the "socialist" way - tax and distribute. If this happens large business owners are more likely to farm their work out to other countries, meaning less jobs for Americans (which we all whine and complain about). So while guys making less than $250,000 a year may get tax breaks, more of them will be unemployed.

    If the "trickle down" economic theory is so bad, as Obama incessantly argues, then why did he prop up Wall Street by signing the Bailout Bill? I'll tell you why - because in his heart he knows that what I'm saying here is true: when big businesses profit, so do the rest of us.

    Obama talks out of both sides of his mouth, which is what socialists typically do.

    Don't vote for this guy. You'll be sorry. He's much farther left of centre than Clinton ever was.

    October 16, 2008 04:32 pm at 4:32 pm |
  10. srla

    As a small business owner who could well be hit up by such a tax increase, I must say that either Joe doesn't understand taxes in the least or is utterly disingenuous. Anyone who is taxed on a Schedule C has ample deductions not available to regular employees that reduce the overall tax burden, and if one were to hire new employees, this amount would be deducted and not taxed. The only way Joe would face additional tax would be if he pocketed additional income in access of around $200,000 – an amount that would be reduced by all the many deductions he would take on the schedule C.

    So if Joe made $350,000, had $75,000 in business deductions plus 25,000 in personal deductions (mortgage interest, etc), his net taxable income would be $250,000, and his net tax increase would be 3% of the $50,000 he made in excess of $200,000 or about $1,500. Are you shedding any tears for this guy yet?

    Honestly, if you are making that kind of money, this tax increase would certainly not be of much consequence to you. If anything, it would HELP convince you to hire new workers and reinvest in your business, since you could deduct this money and avoid taxes on it altogether.

    October 16, 2008 04:39 pm at 4:39 pm |
  11. Carl Trump

    Sorry state of affairs, when this guy "Joe the Plumber" takes center stage. What happened to "Average Joe". He got his 15 minutes so lets please move on to why are these corporate people can steal our hard earned incomes and laugh at what morons we are!

    Sick and tired off fraud and abuse.

    October 16, 2008 04:42 pm at 4:42 pm |
  12. Carl Trump

    Sorry state of affairs, when this guy "Joe the Plumber" takes center stage. What happened to "Average Joe". He got his 15 minutes so lets please move on to why are these corporate people stealing our hard earned incomes and laugh at what morons we are!

    Sick and tired off fraud and abuse.

    October 16, 2008 04:45 pm at 4:45 pm |
  13. Bring America Back!

    He looks like a McVain "plant".

    October 16, 2008 04:46 pm at 4:46 pm |
  14. Peter (CA)

    Doesn't matter if the guy is a plant or not.

    The truth is this spin from the Republicans about higher taxes on small businesses is just more of their lies. If all of you foaming at the mouth right wingers actually read the plan, you would know that the number of businesses that will actually pay higher taxes is small and mostlly reflects a closing of loopholes.

    But I guess desperation is setting in in the Republican camp and the lies and distortions are setting in. There is no socialism, there is no communism in Obama's plan. The only socialism is the corporate bailout your idiot President forced this country into. "Spreading the wealth" is a metaphor, it isn't a government marching order.

    October 16, 2008 04:46 pm at 4:46 pm |
  15. EBJ

    there sure is a lot of "Joe" in the McCain campaign from Joe Six-pack to now Joe the Plumber. I would not be shocked if this Joe was a relative of Sarah Palin sounds like they come from the same family tree to me.

    October 16, 2008 04:46 pm at 4:46 pm |
  16. America think for you

    Vote now don't wait and vote for change. The line will be long in November the 4th. Vote America's future, energy independence, equal pay for equal work.

    October 16, 2008 04:46 pm at 4:46 pm |
  17. Phil in KC

    There's those pesky facts again. Turns out Joe would be better under Obama's plan – until he figures out how to quintuple his earnings. (In this economy, I wouldn't hold my breath, Joe.)

    October 16, 2008 04:47 pm at 4:47 pm |
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