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. mike

    i'd like to make 250K in 2 years... dudes thanks to "W" we are all going to pay, and pay and our kids too, and our grandkids too!!! thanks "W" we will miss YOUR mavrick ways.

    October 16, 2008 02:32 pm at 2:32 pm |
  2. 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 02:33 pm at 2:33 pm |
  3. Dave

    McCain has said in the past that he thinks only people making at least $5 million a year in salary are considered rich, so it's no wonder he thinks that taxing people and businesses making more than $250k would be such a huge hit.

    October 16, 2008 02:33 pm at 2:33 pm |
  4. Montana Jack

    How do you explane "Pro Life- Pro War" I some how beleave killing is killing. See what napalm does

    October 16, 2008 02:34 pm at 2:34 pm |
  5. Disheartened

    I have always been grateful to be born in the United States. I have been an IT professional for over 30 years. Last year for the first time, I broke 6 figures. My taxes went up and I was restricted on 401K contributions. We had no problems with paying the additional taxes. What a privilege it is to live here! As an older worker, I was laid off 2 months and to-date we have lost half of our life savings. My husband was diagnosed with a chronic health issue. In our situation, we are not young enough to rebuild our wealth. We have grave concerns about our once carefully planned future. We are still so lucky. I would never mind paying additional taxes. We have to care about everyone in our country. The American Dream may be having a home and discretionary income. It should not be about acquiring unbridled wealth. Think about your community and our society.

    We need to work together.

    October 16, 2008 02:34 pm at 2:34 pm |
  6. Slow news day??

    This guy is just as smart as Palin.
    I hope you enjoy your 10 minutes of fame. I know how jealous you are that you can not hold a light to Obama, Go back to school and get your dipolma and think of registering to vote in four years.

    October 16, 2008 02:34 pm at 2:34 pm |
  7. AL

    Ya and my husband is "Joe the Pizza Maker" sooooo

    October 16, 2008 02:36 pm at 2:36 pm |
  8. linda

    If you have a little bit knowledge of the tax, you will know

    the higher tax for corropration = the higher price of the products or services = the less jobs in America.

    the cut tax for 95% of american and creating the more jobs is just talking point.

    October 16, 2008 02:36 pm at 2:36 pm |
  9. Michael

    CONFUSED October 16th, 2008 1:30 pm ET

    Is the tax plan for 250,000 net pay or gross pay???????????????????/
    anyone know
    It has always been gross, why change it know. Dems never have, neither has the Government or IRS.

    October 16, 2008 02:37 pm at 2:37 pm |
  10. Darrell

    I must become a plumber in USA cause they out earn Canadians by two hundred grand a year.In Canada they are taxed on what they earn not what their gross sales are.Yeah i know it is similiar there I am just saying what the ....................!!!!!! are they talking about.He is obviously going to do better with Obamas tax proposal

    October 16, 2008 02:37 pm at 2:37 pm |
  11. Frank G

    Sounds like a hose job to me.
    Regarding "I am not President Bush"
    McCain is correct, he's not George Bush.
    Amazingly, he is worse.

    October 16, 2008 02:38 pm at 2:38 pm |
  12. Glen Shouse Jr., Georgetown, Illinois

    John McCain is good for finding stories to tell to people. Like the one about the P.O.W who made the American flag and was punished and then made another out of his shirt........that story originated during WW2. A plumber making $250,000, sounds like a plant. Is McCain trying to create stories. I agree stories are a great way to relate to the people, but Americans know BS when we hear it. No more crooked politics.

    October 16, 2008 02:38 pm at 2:38 pm |
  13. Coloradoan for change

    Take it from someone who worked for Charles Keating and Bob Wurzelbacher in the early 80's. The Keatings are originally from Cincinnati and it seems like quite a coincidence that this guy with the same (somewhat unusual) last name as Keating's son-in-law showed up at the Obama's speech and just HAPPENED to be photographed shaking hands with him...... Hmmmmmm, I smell big money republican bait at work.

    October 16, 2008 02:38 pm at 2:38 pm |
  14. joe the banker

    can't wait to quit my job! start "spreading the wealth around" now! why work and keep your earnings when you can do nothing and get other people's money? beautiful

    October 16, 2008 02:39 pm at 2:39 pm |
  15. Shirley-Ohio

    If Joe the Plumber ever gets his business up and running, he gain more under Obama plan. You also recall Obama saying that for each created job you get 3000 dollar credit so if Joe the Plumber creates five new jobs, he get 15, 000 tax credits which will probably wipe out the taxes that he will be required to pay. However you look at it, Obama has a plan for everyone, McCain has a plan for only the rich to get richer. American people better wake up and smell the coffee because if McCain wins, we are all screwed.

    October 16, 2008 02:40 pm at 2:40 pm |
  16. Adam

    One thing that many people fail to take into account is that the $250,000 figure refers to taxable income, not total income. A business can deduct business expenses, so employee salaries, gas for the trucks, cost of parts, rent for facilities are all deductible. If Joe the Plumber still makes over $250,000 after deducting his business expenses, I would be very surprised. If by some miracle, he manages to exceed $250,000 after all deductions, he would be doing fantastically well. More than likely, the total value of the business is greater than $250,000 – but we don't tax business value unless you sell your business (and even then, only the difference between cost of sale and what you bought it for originally get taxed at capital gains – if you sell it for less than you bought it, you get a tax cut due to capital losses).

    October 16, 2008 02:42 pm at 2:42 pm |
  17. Shay

    Hope Joe employer still employ him after McCain gave him a big settlement to challenge Obama.

    October 16, 2008 02:42 pm at 2:42 pm |
  18. Gia in Los Angeles

    I saw "Joe the Plumber" myself on CNN this morning - he said that what he was asking Obama was a hypothetical and that he does NOT foresee his business making more than $250,000 at this time. He concurred his taxes would NOT be raised; however, he was asking about if, IN THE FUTURE, his business succeeded to the point of making over $250,000.... So McCain's constant badgering was not based on a real example, but a hypothetical.

    October 16, 2008 02:42 pm at 2:42 pm |
  19. Old Guy who seen this before

    Joe is a republican rich guy wannabe and will be a loser all his life voting against himself and then blaming "others" for his failures.

    Sorry Joe, I don't buy it.

    October 16, 2008 02:43 pm at 2:43 pm |
  20. tsm

    I do hope that Joe is checked out. If he is a plant the American people should be informed

    October 16, 2008 02:43 pm at 2:43 pm |
  21. Brandon from Ohio

    More BS from the McSame campaign. 19 days and we won't hear from him or Daily Scandal Palin anymore. Woohoo!

    October 16, 2008 02:44 pm at 2:44 pm |
  22. Carrie Goodeagle Hayden, Idaho

    Joe the Plummer, or Karl Rove Stooge! I'm goin' with the stooge.

    October 16, 2008 02:47 pm at 2:47 pm |

    Ok People Joe Plumber does not earn $250,000 as a plumber now. He wants to purchase the plumbing business that he has been working at. The business is earning 250,000 per year. Get a grip and actually read and open your ears.

    October 16, 2008 02:48 pm at 2:48 pm |
  24. Jennifer

    McShame was trying to scare small business people. small business people should really try to see the truth through this..i think Obama's plan is in their favour.

    October 16, 2008 02:49 pm at 2:49 pm |
  25. Matt

    McCain probably lies to his own mother.

    October 16, 2008 02:49 pm at 2:49 pm |
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