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. euen marshall

    I ask CNN the following :

    Where in the Hell do you get your Polls and why do they
    differ from others. You want me to watch your Network but
    your people lie for the left like the local networks.

    Why can I respeck Lou Dobbs and not the Rest.

    I want a truthfull Answer or will you put this under
    the Rug and let me hanging with out an Answer.
    I have asked the same thing of FOX.

    It only takes one lie to become a lyer.

    Respectfully
    Euen Marshall Dover, Penna.

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

    So, how much do think the McCain campaign paid "Joe the Plumber"? He was certainly, conveniently, used alot during the debate by McCain.

    October 16, 2008 02:18 pm at 2:18 pm |
  3. PROUD MCCAIN/Palin supporter

    Dealt – yes making good for the less fortunate is nice , BUT it's not the government's job to take from us and distribute to who they feel deserves it. That is called Socialism. As a American citizen I have the right to CHOOSE my own charities.

    October 16, 2008 02:19 pm at 2:19 pm |
  4. No ordinary Joe

    Either Joe Plumber has his hopes for his yet to be plumbing business a little too high or he's probably planning to include other "side deals" in his plumbing books. Say hello to the IRS Mr Joe Plumber!

    There is a dent repair business in my town which I frequently drive by. They hardly ever have any visible customers or customer cars present on site. But they have all these brand new gleaming Chevy SUV's and expensive European cars parked outside with the business name nicely painted on all their vehicles. I say to myself, I don't know if you folks got a nice big inheritance or something, but the apparent success of the busines is not coming from fixing minor car dents – no way!

    Things that make you go hmm!

    October 16, 2008 02:19 pm at 2:19 pm |
  5. prince

    To U-N-I-Verse

    Good!!! Good!!! Good Ideas!!!!!!!

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

    just like sarah was macains first stunt so is joe the plumer or maybe he was talking about mario and luige ummm.

    October 16, 2008 02:21 pm at 2:21 pm |
  7. mzgemini

    FROM WHAT I HEAR, JOE THE PLUMBER ISN'T EVEN A REGISTERED VOTER AND WHO KNOWS IF HE EVEN HAS THE WHEREWITHAL TO BUY A $250K BUSINESS...

    THIS WHOLE TOPIC IS A COMPLETE WASTE OF TIME

    October 16, 2008 02:22 pm at 2:22 pm |
  8. James Blaine

    @Confused
    Net Pay, not gross pay.

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

    Was Joe a plant? He's never made $250,000 one year in his life and probably won't. So why was he feigning such interest?
    Then, if all reported is true, he's not truly a plummer? So, what's true about him? Did McCain have him appear at the gathering and pose those questions to make a story for the McCain campaign? Sounds like a Palin tactic!

    October 16, 2008 02:22 pm at 2:22 pm |
  10. Rachielle from VA

    So Joe is a member of the Keating family! WOW, CNN report this pls.

    October 16, 2008 02:23 pm at 2:23 pm |
  11. LOCUTUS OF BAMA

    Joe the Plummer was a Republican plant. Didn't work. NEXT!

    October 16, 2008 02:23 pm at 2:23 pm |
  12. S&A

    Listen everyone,

    Joe does not have a plumber's license let alone a business.
    By the time he makes 250k, everyone's taxes will have increased.

    October 16, 2008 02:23 pm at 2:23 pm |
  13. EY

    $250k net is a far cry from $250 gross. If Joe's company is making $250k net after paying for his shop, his trucks, tools, supplies, power & gas, employess salaires, his own salary, etc. then he will be living the American Dream and can afford an extra 2-3% tax on the income his company earns above the $250k threshold.

    The tax increases are not exactly increases but just allowing the tax breaks to expire, in 2011 I believe. Joe won't have to worry about his taxes going up for a long time.

    I don't understand why neither candidate will address the budget deficit and national debt issues. Won't we need some additional tax revevues to pay down some of our foreign debt and balance a federal budget? Or do we just want to keep running in the red ink? What about the devaluation of the US dollar and the imminent inflation? An average "Joe the plumber" who make $50k a year might find that $50k worth much less in actual spending power.

    October 16, 2008 02:24 pm at 2:24 pm |
  14. rj

    If we listen to all the people saying that paying your fair, proportional amount in taxes is "un-American", soon we won't have an America to come home to. 8 years of selfish, irresponsible REPUBLICAN policies have destroyed this country. McCain is a Republican. Transitive property would state: McCain = Republican, Republican = Destruction of America. Therefore, McCain = Destruction. Basic logic. Anyone with an ounce of sense should be able to understand that. Democratic policies have always profited EVERYONE in this country – Big and little businesses, individuals and families. Make the sensible choice America.

    October 16, 2008 02:24 pm at 2:24 pm |
  15. Gene

    Ok.. lets be realistic here. Given the amount that plumbers make about 50K a year. If the company is making over 250K.. that's probably split between multiple plumbers. So by the time payroll goes out.. and expenses.. they would be WAY under the 250K net profit. That kind of business would never have to worry about Obama's plan.. because business tax is paid based off net earnings, not gross.

    October 16, 2008 02:25 pm at 2:25 pm |
  16. Dave

    this is not the time to raise taxes on anyone.

    Its time for government handouts to stop.

    I have to balance my check book, Congress should too.

    Earmarks = Govt. Bribes

    October 16, 2008 02:26 pm at 2:26 pm |
  17. Ryan, Florida

    Where did this Joe the Plumber come from, why were there national media in his house even during the debate?
    This smells very fishy indeed.
    This smacks of a Karl Rove stunt.

    October 16, 2008 02:26 pm at 2:26 pm |
  18. felicha from florida

    IT AMAZES ME HOW MCSHAME KEEPS "THROWING PEOPLE IN THIS ELECTION"

    1. PROBLEM PALIN>>> LIKEABLE AT FIRST BUT THEN THE WHEELS CAME OFF.

    2. NOW JOE THE PLUMBER>>> UUMM JOE HAS A SON AND I DON'T THINK THAT JOE WOULD APPRECIATE HIS BUSINESS BEING OUT THERE SO THE WORLD CAN MAKE COMMENTS ON IT LIKE WE ARE DOING RIGHT NOW....

    3. I SMELL A LAWSUIT AND A BIG BLOWUP IN MCSHAME'S FACE.

    LORD HELP US BECAUSE THIS IS JUST CRAZY AS HELL!!!!!!!!!

    October 16, 2008 02:27 pm at 2:27 pm |
  19. Republican for Obama

    Say it ain't so Joe, not even registered to vote and not even really a plumber... and related to Charles Keating? Say what?

    October 16, 2008 02:27 pm at 2:27 pm |
  20. MWH

    Okay is Joe the Plumber making 250,000 +? I have a problem feeling sorry for you Joe, I make 40,000. You think i can afford to have my taxes go up?

    October 16, 2008 02:27 pm at 2:27 pm |
  21. ChristineCT

    Joe Sixpack:
    "those people" had the same opportunities you had?Come out of your cave, man. Opportunity is not a given right around here.

    October 16, 2008 02:29 pm at 2:29 pm |
  22. Small Business Owner, North Carolina

    What really amazes me about most of this discussion is the fact that most of America is so greedy they're willing to trade the Freedom of the American Dream for Socialist policies that throughout history have proven themselves to fail and fail miserably. Problem is most Americans have extremely short memories, EXTREMELY SHORT. There is no way for most to learn from history as their memory won't allow them to go back 10 years... Anybody remember the Clinton years, we were in a decent recession coming out of his administration, today we are still dealing with the fallout of that DEMOCRATIC ADMINISTRATIONS SOCIALISTIC program... THE CURRENT MORTGAGE/FINANCIAL has it's root in Clinton Administration policies and Obama is far more liberal and leftist leaning... His record speaks for itself.

    You think things are tough now, Joe the Plumber COULD make $250,000 a year if... he continues to grow his business, adds employees, adds services... EMPLOYING those who are currently "Unemployed and Hurting" As a small business owner, today I don't make $250,000, but the potential is there as my business continues to grow. I employee 8 people part-time and I am in the process of adding 2 full-time. I have struggled for 7 years to get to this point, I have taken part-time jobs of my own at night to help make the ends meet, I have gone with limited sleep, struggled over making my house paymetn and meeting payroll; Senator Obama's plan insults me... When I "make it", and this is Joe the Plumber's point, I should be penalized for my hard work, I should be able to enjoy the rewards not be forced to give it away (excuse me... REDISTRIBUTE MY EARNED WEALTH)

    I have a question, were is the unemployment level today? It is roughly 6%, out of that 6% – 4% are unable to work due to age, health, or other issue that have them unemployable. That leaves 2% true unemployment, out of the 2% how many really want to work verse how many would rather collect a check from the Government? So are we down to 1% who want to work? Currently there are jobs available, they may have to relocate or do something that is "below" their previous level or standard, but they can go to work at something until they find the position they would like to have.

    There are several other points that make Senator Obama an extremly risky choice as President, but that is for another post on another discussion... IF YOU HAVE ANY SENSE AT ALL YOU WILL RUN FROM SENATOR OBAMA.......... PLEASE

    October 16, 2008 02:30 pm at 2:30 pm |
  23. Laurie Miami Beach FL

    Cant you guys see that this guy (Joe) is part of a last dish effort of the republicans. What was he (Joe) doing at a Obama rally???? When Joe is a conservative and prefers McCains idealism. I believe (Joe the Plummer) is a plant by the Republicans. Enough Said....

    Obama/Biden 08

    October 16, 2008 02:30 pm at 2:30 pm |
  24. Reggie

    The fact is, more social programs cost more money. He will have to get it from all of us. Just say NO to Barak by not voting for him and his socialist agenda.

    October 16, 2008 02:31 pm at 2:31 pm |
  25. s4driver

    Ok, I am going to keep this very simple and clear. If you own a business that is listed as an S-Corp, the net income of the business shows up on the tax return of the owner. However, if a business has positive net income it does not mean there is cash for the owner. The positive is used for taxes, debt retirement, investment back into the business, etc. So, you could easily have a business with a positive net income of 250k or more in which the owner receives little or none of that in the form of cash in pocket. If taxes increase for these business, they will hire less people, not invest in expenditures, such as hardware, machines, etc, which drive the economy. Businesses that are creating 250k or more are the ones that are doing the majority of the hiring. Supporting the poor is great....that is what charity is for....not government; that will undoubtedly squander hard-earned $$$ of business owners in programs that have not and will not work.

    October 16, 2008 02:31 pm at 2:31 pm |
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