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. R. B.

    Taxes- A Fact of life

    And by paying taxes...that is how a country functions. And the larger a country gets (population etc.) Taxes can only go up. And who does it hurt the most? Right now, currently, those at the bottom and in the middle; those who make less than that 250K here in the U.S.. Those who bring home an annual income of more than 250K only make up LESS THAN 3% of the U.S. Population. With 250K, you can live comfortably, even in the richest counties like those in N. VA for example, even with the tax increases. Yes you may have worked hard to earn that money, but you have the power to do more for others with that.

    Be greatful. Do more. Stop whining. You are making my ears bleed.

    October 16, 2008 03:27 pm at 3:27 pm |
  2. the end is nigh

    No one should be unfairly taxed, but really, who does Joe the plumber think his hard earned money should go to – Haliburton?

    I don't think he is a serious "average citizen" and I am amazed that McCain paid him so much lip service during a debate that was his last opportunity to connect with average Americans.

    Another missed opportunity by McCain.

    Not that I was surprised......

    October 16, 2008 03:27 pm at 3:27 pm |
  3. CS in Ohio

    Here is some advicee...check to see if Joe is even registered to vote in Ohio and also check the public records and view his delinquent taxes.

    You will be surprised of the information that you find!

    He did't vet Palin so why would McCain vet Joe the Plumber?

    October 16, 2008 03:28 pm at 3:28 pm |
  4. J.P.

    Even if you are correct, it is still "spread the wealth" socialism. Why raise taxes on ANY business and punish those who make more money?

    October 16, 2008 03:29 pm at 3:29 pm |
  5. Winnie Hussein . . . in Montana

    Felicia – of couse small businesses are capable of making over $250,000 a year, but that isn't the point. First of all, most small businessmen and women do not pay themselves $250,000, which is what we are talking about here – individual income tax. Business taxes are a whole other issue. As for construction, my town has more construction companies than doctors, probably because everyone seems to be moving to the mountain west, but, most of these companies make mega-bucks, yet refuse to provide healthcare for their employees, sick days, vacation days, or travel allowance for gas. They may pay their employees a good hourly wage, but it is not enough to purchase an insurance policy with a reasonable deductible. From whom much is given, much is required. Sound familiar? For those businessmen and women who will not provide benefits to their employees while paying themselves huge salaries, they should be made to pay more.

    October 16, 2008 03:31 pm at 3:31 pm |
  6. Leonard

    Regarding Obama's Tax Cuts for the Wealthy, CNN just Factchecked Mccain's claims and what did they find? The bottom line: McCain's claim only works by using an overly broad definition of what counts as a "small business" – and even with that definition, fewer than 2% of business owners would be hit by Obama's proposed rate increase (493000 out of 35 million filers who are considered small businesses) . For those who are affected, the increase would be levied only on a part of their earnings, not all of them (only the part that exceeds the cutoff, for most people that translates into $1500 more in taxes or 3% extra). These were the conclusion drawn by independent studies published by the Tax Policy Center.

    October 16, 2008 03:32 pm at 3:32 pm |
  7. Karen - It's time for change

    I'm not suprise of McCain's tactics but in reality this is what I heard:

    Joe the Plumber doesn't relate to my life at all. I'm the average person making 50 – 60K a year. Warren Buffet said, why should someone who makes 50K a year be taxed the same as me who is worth 56 Billion dollars. Warren Buffet was right and so is Obama.

    If Joe the plumber is making 250K and doesn't want to share the wealth with his employees who making less than him, then he is a selfish person. Joe should want everybody to experience joy the same as him.

    Anyhow, I just heard Joe the plumber say, he was called by the Republican party to be at the rally in Ohio, so I'm not surprise to hear he was planted the McCain party.

    Obama/Biden '08.

    October 16, 2008 03:34 pm at 3:34 pm |
  8. Gracie

    ENOUGH ALREADY WITH JOE THE PLUMBER!!!

    ENOUGH ALREADY WITH JOE THE PLUMBER!!!

    ENOUGH ALREADY WITH JOE THE PLUMBER!!!

    ENOUGH ALREADY WITH JOE THE PLUMBER!!!

    October 16, 2008 03:34 pm at 3:34 pm |
  9. carol

    Yet another dumb person trying to make a name for himself.....and of course he has to be a Republican....how about that!!!!
    It just seems all these Republicans have lost their minds.....or what little is left after being ardent followers of McCain and listening to his rantings and then Palin's stupidity!!!!
    Still, as they say "little things please little minds".......I would say that fits the whole campaign in a nutshell.

    October 16, 2008 03:35 pm at 3:35 pm |
  10. Roland

    So, turns out McCain's October suprise is Joe "sick-crack" the Plumber? give me a break.

    October 16, 2008 03:35 pm at 3:35 pm |
  11. Steve Wimer

    Joe the plumber is an idiot. He doesn't even have a plumber's license? Yet he's worried about $250K income he doesn't make? Get a grip.

    October 16, 2008 03:36 pm at 3:36 pm |
  12. Joe The FAKE

    Joe the plumber apparantley is a Mcain surrogate......And now he is a celebrity ...Joe The FAKE

    October 16, 2008 03:38 pm at 3:38 pm |
  13. Cube Feed

    That guy just opened himself up to the IRS. Next you will hear that he has been indicted for lying on his taxes.

    If he was a plant for McCain, that WAS NOT a very smart idea considering the possible consequences.

    If a plumber is making that much money, he has been ripping some people off. I see why people detest plumbers. The probability is that Joe the Plumber has also over charged an IRS employee. Lets see what happens next.

    October 16, 2008 03:38 pm at 3:38 pm |
  14. Ben

    If you don't understand the difference between taxable and non taxable income, please don't comment here. 2 percent of small businesses would pay 3 percent more taxes under the Obama plan, which is actually just restoring the Clinton tax code. Seriously, you republicans can keep freaking out about supposed socialism though. If I believe that McCain is a nazi fascist, does that make it true?

    October 16, 2008 03:38 pm at 3:38 pm |
  15. Anonymous

    What bank is loaning Joe money today ?

    If nothing else, the dialogue suggests that “Joe the Plumber,” the Everyman voter who became a totem and talking point for both candidates last night, might one day be “Joe the Solar Guy.”

    October 16, 2008 03:39 pm at 3:39 pm |
  16. Gary D Williamson

    OK Folks, lets be realistic.. regardless who's smoke & mirrors you want to believe.. mark my words, within 6 months, whoever is elected WILL be on TV speaking to the nation saying something along these lines... "My fellow Americans, I realize during my campaign I pledged to not raise taxes, actually to cut taxes. But, due to the economic situation in the world and America today we have no other choice, in order to sustain our National Security and provide basic Social Services we simply must increase taxes.."blah . blah, ;blah.. and Washington politics and any “change” rolls right out the window !!

    October 16, 2008 03:44 pm at 3:44 pm |
  17. leapfrog

    Turns out that Joe Wurzelbacher from the Toledo event is a close relative of Robert Wurzelbacher of Milford, Ohio. Who’s Robert Wurzelbacher? Only Charles Keating’s son-in-law and the former senior vice president of American Continental, the parent company of the infamous Lincoln Savings and Loan. No wonder he's voting for McCain...keeping it all in the family...

    October 16, 2008 03:44 pm at 3:44 pm |
  18. rory ryan

    Ken .... a very narrow perspective. If you open your ears for a moment McCain said he would balance the budget. by the end of his first term How?

    October 16, 2008 03:46 pm at 3:46 pm |
  19. thomas

    McCain says he won't raise taxes and he will balance the budget the budget by the end of his term. But if he fails to balance the budget during the first three years, then his deficit spending will result in higher debt which is the same as raising taxes, because the debt has to be paid for with taxes. Bush raised taxes by more than five trillion dollars, the biggest tax hike of all time.

    October 16, 2008 03:46 pm at 3:46 pm |
  20. lil

    It is regrettable that Joe the Plummer allowed himself to be place on the public stage and to be used as a poltical pawn by McCain / Palin for their self-serving political ambitions. As many fact checking sources and business and tax experts have cited that most small businesses in America would not – and I say again, would not ! – see an increase in their taxes: but rather, a reduction in the taxes to be paid on their net income.

    How sad that Joe the Plummer was misdirected in his errant mission. Even in the face of the truth and undisputable facts, he allowed his political inclinations to be manipulated and himself to be exploited by sef-serving political oppotunists .

    October 16, 2008 03:47 pm at 3:47 pm |
  21. Mark

    Joe the plumber shouldn't take for any subsidized government loans, business deductions, or anything else he can discount from his taxes with that attitude.

    If everyone had this attitude, we'll never get out of the economic mess that the Republican administration has created. We're either in this together or we're not... apparently Joe does not want to help his fellow countrymen. So much for their call to patriotism...

    What a bunch of hypocrites!

    October 16, 2008 03:47 pm at 3:47 pm |
  22. David

    | | McCain | Obama
    --------------------------
    Income | Avg. tax bill | Avg. tax bill
    Over $2.9M | -$269,364 | +$701,885
    $603K and 2.9M | -$45,361 | +$115,974
    $227K-$603K | -$7,871 | +$12
    $161K-$227K | -$4,380 | -$2,789
    $112K-$161K | -$2,614 | -$2,204
    $66K-$112K | -$1,009 | -$1,290
    $38K-$66K | -$319 | -$1,042
    $19K-$38K | -$113 | -$892
    Under $19K | -$19 | -$567

    The negative numbers represent a tax cut and the positive would be how much you would be taxed. Notice under the McCain plan, the richest Americans get the biggest tax breaks and the poor making less than 19K a year get a tiny $19 in relief. Obama's plan is obviously one that takes into account the struggle and pain of the average American today. Even that Joe the Plumber guy would only have to pay $12 in taxes because he said his company makes a little more than 250K. He can afford $12. No tears from me.

    October 16, 2008 03:48 pm at 3:48 pm |
  23. Scott, Wichita

    At least McCain's campaign has a definition of a "small business"
    Biden says "98% will see a tax reduction" so he must be putting the limit somewhere near 250-300k

    In my opinion, "small" means any company/business/firm making less than 5 million a year. Then again, the company I'm working for rakes in double-digit billions in revenue every quarter, so i guess i can't really make that distinction

    October 16, 2008 03:48 pm at 3:48 pm |
  24. starknight

    'Give to Caesar what you OWE to Caesar – that is the Bible telling you to pay your taxes!
    Joe the Plumber – if you are capable of making $ 250,000 or more – no one's stopping you! – Just give the govt a meagre portion of it – you still have the rest of the money – that a lot of people DO NOT have!
    I guess he just doesn't get it !!

    October 16, 2008 03:49 pm at 3:49 pm |
  25. Average Joe, not the plumber

    MY GOSH! HOW CAN SO MANY PEOPLE NOT UNDERSTAND: JOE THE PLUMBER DOES NOT MAKE $250K/YR!! HE WANTS TO BUY A BUSINESS THAT WILL MAKE $250K/YR!! AND THAT DOES NOT MEAN HE IS RICH AND HAS $250K LYING AROUND!! A BUSINESS' REVENUE OR PROFIT IS DIFFERENT THAN ITS PRICE!! WOW THE IGNORANCE IS JUST STAGGERING!!

    October 16, 2008 03:50 pm at 3:50 pm |
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