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. David, Silver Spring, MD

    I know rich folks feel like they shouldn't have to pay a bigger percentage of their wealth than anyone else. This goes back to at least the late 70's, when the U.S. competitive advantage started to slip away (electronics, cars, clothes–everything started being made overseas) and the wealthy figured they needed a new trick to maintain their status. So for the last 30 years, the gap between rich and poor has widened.

    During the Bush years, income for average citizens fell. When interest rates started to rise, all those adjustable-rate mortgages become unmanageable for people with flat/declining income. The resulting credit crunch and market meltdown has at last hit the rich. Their regressive tax policy, the goose that laid their golden eggs ever since Reagan, is now laying eggs of tin. Pain, to borrow a phrase from Barack Obama, is trickling up.

    October 16, 2008 03:53 pm at 3:53 pm |
  2. John the Electrician

    John McCain said he can balance the budget in 4 year, it is either he is clueless or he is lying in front of national TV. I really don't care about Joe the Plumber said.

    October 16, 2008 03:54 pm at 3:54 pm |
  3. Tulsa S

    I just read that Joe the PLumber is related to Keating of the Keating 5, that he was a plant........is this true.......

    October 16, 2008 03:55 pm at 3:55 pm |
  4. John in Ohio

    McCain and McCain supporters attack this as a redistribution of wealth... while proposing redistribution of wealth as their mortgage rescue plan. Obama's justification for the tax increases is that those who can afford to pay more should pay more to make things better for everybody.

    McCain's mortgage rescue plan buys homes at cost, way above their current market value, from the banks. It would then let the residents take out a low interest FHA loan from the government for the market value. The taxpayers will be paying the difference, and McCain justifies this by saying that EVERY taxpayer should pay more to make things better for everybody. And on top of that, McCain's plan makes it okay for banks to lend money irresponsibly, because the government will bail them out. It's a mechanism for transferring wealth from every taxpayer to the irresponsible banks that have gotten us into this mess.

    Even if I made over $250,000, I'd much prefer Obama's plan to McCain's plan. They're both redistribution of wealth, they both have socialist elements in their plans (I'm a social democrat and that doesn't bother me at all), but Obama's plans are smart while McCain's are dumb.

    October 16, 2008 03:56 pm at 3:56 pm |
  5. rowzeer

    Repubs always want less taxes for the rich even when they're poor....just in case they hit the lottery.

    October 16, 2008 03:56 pm at 3:56 pm |
  6. rowzeer

    $250,000 profit for any business is pretty darn good!!!

    October 16, 2008 03:57 pm at 3:57 pm |
  7. Tulsa S

    I just read that Joe the Plumber is related to the Keating in the Keating 5 scandel..........That he was a plant by McCain, Maybe McCain is till Palling around with a Swindler........

    October 16, 2008 03:57 pm at 3:57 pm |
  8. WC Fields

    The reports of McCain's death have been greatly exaggerated.

    🙂

    October 16, 2008 03:58 pm at 3:58 pm |
  9. Tony

    TOUNGES ARE BEGINNING TO WAG.

    RUMOR HAS IT THAT IT WILL BE MADE PUBLIC THAT "JOE THE PLUMBER" WAS A PLANT FOR THE REPUBLICANS!

    FACTS COMING OUT TODAY ARE:
    --------------------
    McCain did Joe the Plumber no favors.
    Thu Oct 16, 2:27 PM ET

    You knew it would happen. Joe the Plumber's 15 minutes of fame in last night's debate have turned into a round of public humiliation for the wannabe business owner. The Toledo Blade is reporting that Joe has no plumber's license.

    To make matters worse, the Blade also found that the Ohio Department of Taxation placed a lien against Joe because $1,183 in personal property taxes had not been paid. To pile on, the paper disclosed, based on divorce records, Joe's 2006 income — $40,000, hardly enough to qualify for the tax hike he's so concerned about.

    October 16, 2008 03:58 pm at 3:58 pm |
  10. Andrew

    Joe the plumber????Please......I'm a certified project manager with an engineering degree with over 12yrs experience in ICT and the I can in a very best case make $150-170K a year!! What plumber makes $250K a year. Duuuuuuuuhhhhh!!! I guess we are stupid right??

    October 16, 2008 03:58 pm at 3:58 pm |
  11. Al

    I believe "Joe The Plumber" is not a true plumber, but a plant for McCain? He Did say is a conservitive; this mean he's a Repulican.

    October 16, 2008 04:01 pm at 4:01 pm |
  12. JACK

    THE PLUMBER IS A PLANT FROM MCCAINE'S CROWD,

    LIKE ALL THE PEOPLE IN HIS CROWD.

    HE IS NO PLUMBER ITHER,

    IT WAS TOLD ON CNN THIS MORNING.

    October 16, 2008 04:03 pm at 4:03 pm |
  13. ME

    Secret Service found NO CREDIBILITY to the lame story of someone yelling "kill him" at a Palin rally. No cooberation, no security interviews with ANYONE else hearing it. Secret Service debunked the story...yet another lie Obama told last night.

    October 16, 2008 04:03 pm at 4:03 pm |
  14. sky

    Joe is a plant

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

    Wow.....what a bunch of LAZY IDIOTS. Joe the Plumber should not be penalized for striving to purchase a business and make over $250,000 a year.

    What Obama is proposing is a Socialist society much like the former Soviet Union. Get out, get an education, and work your way up the ladder and you get penalized. That is not what America is about, at least unless Obama becomes president.

    NOBAMA 2008

    October 16, 2008 04:04 pm at 4:04 pm |
  16. James

    Joe the Plumber has not been paying his taxes. The court in his hometown has a lien against him regarding his last tax return. I'm unsure why anyone would let him buy a business if he doesn't follow the rules like the rest of us

    October 16, 2008 04:05 pm at 4:05 pm |
  17. ooouch!

    John McCain should NEVER have mentioned this guys full name. again McCain shows how irresponsible, arrogant and ambitious he is. McCain has caused harm to this guy and his family...i can not imagine the harm McCain will cause the rest of us. hey Joe, just wait for the 15 min. to end, and keep your head up dude.

    October 16, 2008 04:05 pm at 4:05 pm |
  18. CASECLOSED

    In Response TO GREG IN MPLS. If for example you have a net taxable income (after expenses people!) of $300000 under obamas plan the difference between 250K and 300K is taxed at the higher rate. So the extra 50000 is what will be taxed at 39% instead of 36% this equals $19500 up from $18000. So joe the plumber is afraid to buy his new business because if he makes it to this bracket he will be required to pay $1500 more in taxes, roughly $125 more per month.
    TO JOE, Please donot buy this business since you will be paying an extra $125 on your return each month. What a terrible investment it will be, you certainly dont deserve to be punished by such hefty amounts for all your hard work, and we have no idea how you will be able to take care of your family after loosing this extra $125 every month!!!

    PLEASE!!!!!!!!!!!!!!!!!!!!!!! What!! If you make $250k-300K net taxable income and you are afraid of an extra $1500 a year YOU should not be anywhere near ANY business.......you have neither the intelligence or the gumption.

    October 16, 2008 04:08 pm at 4:08 pm |
  19. msnola60

    "JOE THE PLUMBER" according to news media is now really a lincensed plumer or a registered voter. He should have not put himself (Joe) on display that way.

    October 16, 2008 04:09 pm at 4:09 pm |
  20. scaredof Obama

    Everyone is so freaked about another Republican in the oval office. What freaks me out is having complete "Democrapic" control. Why are you all agreeing that we need a change with Obama, when the Democraps control the House and Senate. Hello... It's not all Bush. I am glad for Joe the plumber, finally someone showing who Osama, oops I mean Obama really is!!!

    October 16, 2008 04:12 pm at 4:12 pm |
  21. No way no how no McLies

    1- Joe "the plumber" lives and works in Ohio, but somehow, he was able to vote in the PA primaries?? Is that not fraudulent, and is nobody paying attention to this?

    2- Joe "the plumber" has a two liens against him- One from the state of Ohio for- get this- owed taxes $1200 to be exact.

    3- Joe "the plumber" would actually benefit from Obama's tax policies

    Go figure

    October 16, 2008 04:12 pm at 4:12 pm |
  22. Magnus

    I ask of the candidates right now:

    How much is a gallon of milk?

    (no googling)

    All of these candidates are "out of touch" with the common person ! Not one of them would be able to answer the above question.

    Not one of them has no idea what it's like to live an ordinary life in the United States right now.

    All of their ideas sound good at their income level..... but let them live life making 30K per year and get back to me.

    October 16, 2008 04:13 pm at 4:13 pm |
  23. NC Voter

    Joe the Plumber needs to take his own advice and really study the issue in more detail. Sen. Obama's plan would lower his taxes now because he is not making $250k. If he does grow his business to that amount, his increase would not be on the full amount. Sen. McCain wants, in his own words, pay for his $5k healthcare tax credit by taxing the average $5800 that we pay for coverage. That means we pay a net of $800 plus the taxes on the full $5800 as opposed to paying the $5800 on a pre-tax basis. Since Obama didn't go there I will. If Sen. McCain is so much better than Pres. Bush, why wasn't he able to beat him in 2000. It was his lack of substance on the important issues that made it possible for Bush to become President in the first place. We needed a change then and we need one even more now.

    October 16, 2008 04:13 pm at 4:13 pm |
  24. Amy Edelman

    Everyone seems to be smart enough to understand that Joe the plumber
    is no way netting more than $250,000 a year.
    If he is in fact is planning to buy the plumbing business that he is working for he will have tremendous expenses and loan repayments that will show a moderate income. If he is going into business he should already understand that.

    October 16, 2008 04:13 pm at 4:13 pm |
  25. Steve in CA

    @North Dallas Thirty – what does "giving more than required" have to do with anything? Under McLame, the more you make, the more you save on taxes. I know, that sounds fair to those who have so much money, they have to decide if they want to drive the Benz, BMW, or late Holmes drive them to work in the Bentley. I think these guys can afford to pay more than the single parent trying to put food on the table and keep a roof over their heads. Get real, would ya!

    October 16, 2008 04:17 pm at 4:17 pm |
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21