October 16th, 2008
12:00 PM ET
14 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. JO

    My name is Jo also but I"m a female who doesn't have any faith in McCain. He is like a broken record,repeat, and more repeat. Joe don't trust this man go, with your namesake and you'll go to bed and wake up happy with the world as your oysterand money in the bank. "God Bless", JO

    October 16, 2008 01:58 pm at 1:58 pm |
  2. Edward

    To the person who said that Obama will raise my taxes, I wish that he could. That would mean that I'm pretty well off and in that case I wouldn't mind paying more anyway ... It's not like I would miss it.

    October 16, 2008 01:58 pm at 1:58 pm |
  3. bill pike

    biden beat me to it-what plumber makes $250,000 net income???? i live in what is called north dallas, and most of the people in this neighborhood don't make that much. maybe they should become a plumber????

    October 16, 2008 01:58 pm at 1:58 pm |
  4. Gtnaustin

    OMG - I'm a small business because I file a schedule C for consulting expenses. I always just thought I was "self employed". Guess you learn something every day.

    October 16, 2008 01:58 pm at 1:58 pm |
  5. Debby

    AdamW your info is totally wrong. A business that makes over 250. and under a million is going to feel the pinch with Obama's plan. He is raising the cap on payroll taxes and anyone on here that owns a buisness knows that quarterly's and workmans comp. are the 2 most expensive payouts on running a business. Alot of small buisness owners also pay for complete employee health care. This is more weight in gold for workers than getting one time tax credit. Alot of small business owners do make less than 250. in their own paychecks, but their business revenue that goes over that number will see an increase in a payroll taxes. How is this helping the small buisness owner when your using your refund to pay for your increase in payroll taxes. This is why I found Bidens business comments way off base.

    October 16, 2008 01:58 pm at 1:58 pm |
  6. Rashawn

    joe the plumber was sent by the mccain camp. The average of a plumber is 47,000. He is related to Charles Keating....Don't belive me, look it up your self

    October 16, 2008 01:58 pm at 1:58 pm |
  7. Bill Clinton

    Joe, ever thought about $4.0 gas, unemployment, infalation....? Income Tax would be my least concern.

    October 16, 2008 01:58 pm at 1:58 pm |
  8. ah_heck

    If he has a business only making 250,000 and has employees, That is a small business.

    Not if you take into fact the over head of just running the business, paying the employees, paying taxes at the rate now. The profit margins are not going to be much.

    Now add in paying to health care for all employees, having the taxes increased.

    Plummer Joe might want to Rethink the American Dream.

    Working all his life to get ahead, then he finally gets to a place he would like to be. The Government is saying What you worked so hard for, we are giving it to someone else.

    *Spread the wealth around"

    (if a teacher in Chicago makes 85,000 to 100,000, a small business making 250,000 is hardly anything for a business.)

    October 16, 2008 01:59 pm at 1:59 pm |
  9. Aaron

    Please don't let McCain hijack democracy by misrepresenting the truth with one misinterpreted, anecdotal example. Get the facts. Read the fact check attached to this article, vote Obama 08. Get America back on track.

    October 16, 2008 01:59 pm at 1:59 pm |

    to Confused:
    It is on Adjusted Gross Income. AGI.

    October 16, 2008 01:59 pm at 1:59 pm |
  11. Nick

    In another topic on Joe the plumber ATLANTA (Atlanta October 16th, 2008 11:56 am ET) wrote:

    " BIDEN BIDEN BIDEN, your failure to understand business cracks me up. Labor Stats show plumbers make $47,350, round that to $48,000. If Joe employs 4 plumbers at $48,000 and 2 apprentices at $20,000 , an office manager at 40,000 and receptionist at $25,000 then he must make at least $297,000 to pay his employees..."

    I hope most of the general public is aware that all above-mentioned figures counted as an expense, not as a profit/income. And we don't pay income taxes on our expenses 🙂 Indeed, Ignorance and arrogance belong together

    October 16, 2008 01:59 pm at 1:59 pm |
  12. RyanM

    Turns out Joe the Plumber does not have a plumbing licence.

    October 16, 2008 02:00 pm at 2:00 pm |
  13. pawstiv1

    Funny how those that cry 2% is 2% too much don't indicate which group they are in.....we can probably all guess the answer to that one. I am in the 98% group and would love to have my taxes go down and the 2%'s go up, since they are the group that been enjoying the fruit of the last 8 years.

    I love to look at these "fact check" stories.....98% of the stories from the McCain camp are found to be false/misleading.....but hey, we knew that already.

    October 16, 2008 02:01 pm at 2:01 pm |
  14. McLiar and Mr. Clean

    Seriously the conservatives are trying to spin silk from a pile of manure. We are tired of the direction the conservatives and their rich buddies have taken our country in, and the majority of us have had enough. Anyone who thinks my heart goes out to some guy who is supposedly in a position to buy a company that nets over $250,000/year is sorely mistaken. Only McCain and his campaign would latch on to this guy as representative of the "Average Joe." To McCain someone who makes less than $500,000 is a pauper. I've got a real shocker for you McCain...some of us can't afford to buy one mansion, much less a baker's dozen of them.

    October 16, 2008 02:01 pm at 2:01 pm |
  15. SDunn

    Ken, McCain will raise your taxes. He's going to have to raise someone's taxes if he plans on decreasing the deficit. He plans on continuting to finance 2 wars plus his Bush tax cuts. How the heck do you think he's going to pay for all of that if he dosen't raise someone's taxes????? How is he going to pay off the deficit in 4 years like he claims???? He wants to tax your health care benefits! He wants to include that $5000 credit as income! That's an increase right there!Ridiculous, absolutely ridiculous that you trust McCain. It really shows me where you're coming from.

    October 16, 2008 02:01 pm at 2:01 pm |
  16. The Hairdresser

    What constitutes a small business. I own a Barber Style Salon in a small town. I would be thrilled to be making $250. I don't know to many people that make that kind of money. I'm lucky to make $30K
    In the lost of new construction I can't imagine a plumber making anything like that. Go Obama! Sarah Palin needs to point out to McCain that her child has downs syndrome not Autism. I have an autistic child and there is a big difference. They know how they got downs, they don't know how 1 in 150 children get Autism.

    October 16, 2008 02:01 pm at 2:01 pm |
  17. Dallas, TX

    Geez people leave Joe alone, all he wants to do is buy a business and live the American dream!

    Why should he after all his hard work be taxed to death to help those who are just waiting for a hand-out from the government!

    Obama will raise taxes that is a fact. So for those of you what to ignore this reality, well go head, you'll be sorry sooner or later.

    My vote goes to McCain. I do not trust Obama and he does not have the experience needed to fill the position of President.

    McCain/Palin '08!

    October 16, 2008 02:01 pm at 2:01 pm |
  18. Gtnaustin


    My understanding is that it is NET earnings. So work those deductions and you are in good shape. If I can manage to deduct my entire income every year – so can you. Just REALLY familiarize yourself with the tax laws (you know – like while you are in the bathroom because they are BORING and conveluted).

    October 16, 2008 02:01 pm at 2:01 pm |
  19. Pat

    If this Joe the Plumber is such a good friend of John's maybe John should ask him to fix a few of his pipes as there's definately a few leaking or full of air!

    October 16, 2008 02:02 pm at 2:02 pm |
  20. ARich

    I honestly think that "Joe the pulmmer" was planted by the McCain camp. McCain spent entirely too much time trying to bring home his point.

    October 16, 2008 02:02 pm at 2:02 pm |
  21. Billy J , TX-

    More doubletalk from the party who seems to have cornered the market on 'up is down, black is white, no is yes'.

    I live in Texas…. and sure would love to see our state blue again, the way it used to be. I certainly intend to do what I can to help Obama, out this direction. The republicans here and on the hill have failed in every aspect … both in good governance and in their own ideology. Corrupt, Hypocritical (gay bashing while hanging out in mens restrooms, or chasing underage pages around)(proclaiming how great our wars are while refusing to serve themselves)(saying they support drilling but leaving all these wells here in Texas capped) Influence peddling, and DEFICIT SPENDING!!! They have habitually lied to our faces while doing the opposite of whatever they claim to be about.

    I can't help but think that more and more folks in my family and around here are looking for an honorable way out of the republican party so they can vote democratic in the coming years. They have certainly been taken advantage of these last 15 yrs in Texas. Gig em' Barack!

    October 16, 2008 02:02 pm at 2:02 pm |
  22. Gregg

    Joe the Plumber is full of it! Very Very few plumbers make 250 grand a year. Anyway he should take some of that 250 and get him some rogain for that cone head......................

    October 16, 2008 02:02 pm at 2:02 pm |
  23. Rupert Grint

    I lived in Ohio (where Joe the Phony Plumber is from) for years, and he brings back scary memories of the conservative morons who live there. This guy was surely a plant by the local Mc Cain campaign robots. Here's why it's obvious.

    First, he says he's a plumber, but has no license. If he's working under his employer's license, he's probably an apprentice and will be in no position to buy a company for quite some time.

    Second, he says that the business he plans to buy makes "oh $270....$280,000 a year".. Is this gross revenues? Is it net after costs of doing business? Is this fictitious compay incorporated? If so,how many other shareholders are there? Or is it a partnership? Sole proprietorship? If so, is he keeping all of the net earnings or paying himself a salary? (Oh yeah...forgot to say I was a lawyer in Ohio)

    As I understand it, Obama claims his tax scheme will lower taxes for individuals making under $250k a year. So ol' Joe would need to give Obama a lot more information before he could even answer the question.

    Which is, once again. why I think good ol' Joe was a plant. Probably by the local Republicans and not by the McCain campaign. And I'm not worried, it he WAS a plant, the media will dig it up. And Republicans......quit your crying. McCain has lost the election, and if you can be objective for a second, the reasons are legion and obvious, Better luck next time.

    October 16, 2008 02:03 pm at 2:03 pm |
  24. phil

    Mr Universe is so right. I want more American to re-read his comments:

    What's the matter CNN, don't like what I have to say about Republican tax philosophy? We'll see if you print this this time. It's certainly relevant to the topic here. Anyway, it seems like a lot of people have fallen for the great Republican lie: The claim that tax breaks for big business creates job, that if they have more wealth, it will rain down upon everyone else. Tax breaks for the wealthy DO NOT create jobs, because increased revenue does not create jobs. What's the incentive to hire someone just because you have more money in your pocket? That makes absolutely no sense. They aren't going to hire more people if there's no increase in customer's demand for their product, not matter how much of a tax break you give them. A demand for an increase in production is what creates jobs. If a company's profits increase, they don't reinvest it in more labor unless there's an increase in demand, they just keep the profits. And if there's an increase in demand, they'll hire more people either way because they have to in order to keep up with demand. That's why Republican policies lead to nothing more than increased income disparity and a rise in inflation. Demand comes mostly from the bottom up, which is why it makes more sense to give those tax breaks to consumers who then stimulate the economy by buying goods and services from those businesses.

    MacBush and MacPalin and THE RUPUBS you lie to the American people alot. Obama is much Much MUch MUCh MUCH qualify and intelligent than mccain.

    Vote for Obam/Joe ticket for you happiness.

    October 16, 2008 02:03 pm at 2:03 pm |
  25. Grandpa Mike

    Once again "Plumbers" have come into question in a political campaign. Let's get some in depth research done on this Joe guy? Find out what he's all about, no coincidence if he is in fact related to Keating..

    October 16, 2008 02:04 pm at 2:04 pm |
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