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. Happy in Arizona

    It appears to me that John McCain is becoming senile, he's very erratic, and did not speak well at all last night. I don't know what the CNN panel was watching, but certainly not what I saw and heard. McCain never even began to win or be predominate in this debate. Even McCain would not say his VP is ready to be President. He knows fair well she is nothing more than an ignorant woman with no morals or ethics at all. I am a Republican, but again, after last night, and the campagin McCain/Palin have been running, I will vote for Obama. At least he stuck to the policies and plans he believes in, and as for McCain, with all the years in Washington, he has heard and done nothing,

    October 16, 2008 12:44 pm at 12:44 pm |
  2. Dan, Mpls

    Someone should find out more about Joe's and the plumbing company's background. I have a feeling Joe is just making this up. Can he reaaly afford to buy the business and is that business reaaly earning more than $250,000?

    I'm predicting that Joe wished he never spoke up because someone will probably check him out and reprot that he is a phony.

    October 16, 2008 12:45 pm at 12:45 pm |
  3. Greg in Mpls

    Can someone answer me this...just how much will someone who makes $250K per year pay in taxes? Wil they pay an extra few thousand? Maybe $10,000?

    The republicans act as if these people will lose their entire pay check. As if they will be taxed up to 99% of their income. Let's keep some things in perspective people...their taxes will go up, but at $250K per year, they won't be hurt as much as someone trying to get to the $30K mark would by getting a tax hike.

    October 16, 2008 12:45 pm at 12:45 pm |
  4. Brian G, Sugar Land, TX

    There seems to be a large misunderstanding between revenues of $ 250,000 a year and pre-tax gross income of $ 250,000 a year.

    My brother runs a small carpentry business and his revenues (even in a good year) rarely run greater than $ 350,000. When he calculates his pre-tax gross income that figure drops to half $ 175,000.

    Obama is correct, most small businesses' TAXABLE income is well under $ 250,000.

    Joe's sory sounds fishy to me. I am not sure his qualified to be more than just a plumber. He doesn't seem to have any business acumen.

    October 16, 2008 12:45 pm at 12:45 pm |
  5. Ron

    Joe the plumber apparantley is a Mcain surrogate.
    His home doesn't look like he makes 250K..
    He said in another MSNBC interview that he is making much lesser than 250K currently.
    Also, he is planning to buy a business having income of 250K..

    Ron

    October 16, 2008 12:45 pm at 12:45 pm |
  6. Chut Pata

    What really happened between Joe the Plumber and Barack Obama.

    Michelle found a leak in her hot water tank and called Joe the Plumber. Joe fixed it and handed over the bill. Barack saw the bill shouted, "Hell, I am an Honor Roll graduate of Harvard and a senator, but dont make this kind of money as lawyer or as a senator".

    Joe replied, "Yes, that is why I resigned from senate, burned my law degree, and took a plumbing diploma from my local community college".

    Guess what Obama is thinking now ... (to hell with presidency)

    October 16, 2008 12:46 pm at 12:46 pm |
  7. Joe Sixpack

    Beah; and the fact that they don't have an education and skills is my fault so I should be penalized for making money to support my family. These people you refer to had the same opportunity I had.

    October 16, 2008 12:46 pm at 12:46 pm |
  8. unknown

    ALL REPUBLICANS ARE RACIST. THEY DONT CARE IF MCCAIN IS BS THEY JUST WOULD NOT VOTE FOR A BLACK MAN. THIS WAS A SET UP TO BRAINWASH MORE PEOPLE. I HATE THIS COUNTRY. NOTHING BUT LIES. CALLS OBAMA A TERROIST WHEN BUSH IS IN IRAQ KILLING INNOCENT PEOPLE OVER OIL.

    October 16, 2008 12:46 pm at 12:46 pm |
  9. lily33

    CNN, thank you so much for answering the question I had. I appreciate the detailed comparisons of both plans and how EXACTLY that would look like if he were to file as a small business owner.

    I just hope the rest of America reads this informative piece. My opinion, its not fair to attack Joe the plumber. No need to get nasty with Joe, he has a very solid concern. These questions are important and the important thing to focus on is to get ALL the facts straight when dealing with these important policy issues. Let the issues speak for themselves.

    Once again, thanks CNN!

    October 16, 2008 12:47 pm at 12:47 pm |
  10. gl

    Please CNN can you tell us the truth about Joe the plumber. He is any kin to Charles Keating 5? The American people need to know that McSane is a liar and a nut case.

    October 16, 2008 12:48 pm at 12:48 pm |
  11. Vee

    And the McPlant is not even a registered voter. Wow...this was the best example McCain could find....very, troubling and sad.

    I cosign on that American Dream!

    October 16, 2008 12:48 pm at 12:48 pm |
  12. Xavier, Saint Louis, Missouri

    Do anything, say anything to win a vote, A.K.A. Win at all cost. Ain't that what Bush did to Al Gore? Bush went so fare as to steal the election. We had enough of this ideology. TIME FOR CHANGE WE CAN BELIEVE IN!

    Less than 3 weeks to go! GOP, can you say landslide victory?

    YES WE CAN!

    October 16, 2008 12:49 pm at 12:49 pm |
  13. tulsa

    Once again, McCain lies about a plan that he apparently didn't read or understand. Great article from CNNMoney.

    October 16, 2008 12:49 pm at 12:49 pm |
  14. Pete from PA

    The interesting thing that Obama said to Joe the Plumber is that any business with over $250,000 in REVENUE would have higher taxes. REVENUE should not be confused with PROFITS or NET INCOME. PROFITS are what is left after expenses are paid.

    REVENUES-EXPENSES=PROFITS

    If he did mean REVENUE, then yes the tax plan is very scary. While Joe's business might have $250,000 in REVENUE, he will then need to deduct expenses like salaries, cost of materials and health care to get to PROFITS. After paying all of his expenses he may only have $30,000 of the $250,000 left to support himself and his family.

    Can anyone clarify this point?

    October 16, 2008 12:51 pm at 12:51 pm |
  15. proud army and navy mom

    This idiot was on every news station. This is the face of greedy, people. If you make more than a quarter of million dollars, you need to pay your fair share.

    95 of the US people don't make that much. He needs to stop crying like a little girl and be happy that he is blessed. Moron!

    October 16, 2008 12:51 pm at 12:51 pm |
  16. FEMALE VOTER

    Thank you, thank you, thank you for stating the facts CNN. It would only be a 2% raise. Even Forbes Magazine has it at 2-3% for small businesses and people of that income bracket. Mcfool and crew needs to stop trying to dumb down Americans.

    October 16, 2008 12:52 pm at 12:52 pm |
  17. Rusty

    There are real differences between Obama's and McCain's tax plans. Smart people can disagree with the plans. Why then, does McCain feel the need to distort both his plan and Obama's? Why not tell the truth and let people decide?

    Read the link on this article and see that the increase is next to nothing (under $2000) for those near $250,000. The changes in health care tax policy McCain proposes would cost a small business owner more than that $2000 and encourage us to stop offing coverage for our employees.

    October 16, 2008 12:52 pm at 12:52 pm |
  18. Pat

    Race has a major part in this election, but not for me. Simple, if McCain's running mate was a light bulb I would vote light bulb.

    October 16, 2008 12:53 pm at 12:53 pm |
  19. Brenda R. Harris

    VOTE,VOTE,VOTE. OBAMA. then Joe the plumber can have his business without a headache.

    October 16, 2008 12:53 pm at 12:53 pm |
  20. Gracie

    OKAY.... I don't mean to be RUDE, but this guy JOE is not solving the economic issues. He's gotten his 15-minute of fame, NOW let's get back and FOCUS on the issues i.e., JOBS, PENSIONS, HEALTHCARE, WAR IN IRAQ, ETC.

    Joe the Plumber is NOT what I'm worried about..... stop wasting time on this guy, let's start focusing on the issues.

    There are other Joe's in the world.... Joe the Carpenter, Joe the Teacher... Joe the waiter, Joe the Bus Driver, Joe the Garbage Collector, etc. This Joe the "plumber" is more blessed than most other Joes, so WHY are we focusing so much time on HIM and NOT the others who are truly struggling?

    ENOUGH WITH JOE THE PLUMBER!!! He's more blessed than other Joes, so let's NOT make this all about him.

    October 16, 2008 12:53 pm at 12:53 pm |
  21. Maggie from Virginia

    I just don't understand why the McCain camp keep lying. Do they not see that people are more informed these days and will not go for just anything?

    October 16, 2008 12:53 pm at 12:53 pm |
  22. Independent for Obama

    I didn't know he might be a realtive of Charles Keating, hmmm. I'm for raising taxes if it helps this darn economy.Our income is over $250,000 and I'm willing to"share the wealth".

    What is so wrong with being a liberal? Why so full of hate? We have different views and that's what makes America great.

    Look we had a conservative in the White House for 8 years and look where we are at now? Time for some changes. I was leaning to vote for McCain, but he makes no sense to me. Then picking Palin just offended me. This is not the same McCain. I was fooled twice, no more.

    October 16, 2008 12:53 pm at 12:53 pm |
  23. Charles Obrien - CT

    THIS IS AMERICA, THE LAND OF THE FREE.

    Joe Plumber can have a business if he wants to, he can make as much as he can if he wants to, he can DO WHAT EVER HE WANTS WITH HIS MONEY TOO.

    He does NOT have to spend, spread or give it ($$) away if he does NOT want to.

    HE CAN ALSO VOTE HOWEVER and FOR WHOM EVER HE WANTS TO.

    THIS IS AMERICA, HE IS AN AMERICAN, THIS IS OUR ( the voters) COUNTRY. WE DO NOT HAVE TO FOLLOW THE "pied piper".

    October 16, 2008 12:53 pm at 12:53 pm |
  24. Felly

    Americans should be honest with themselves by answering this simple question. How come our economy is now tanking and in reccession with all the tax cuts that Bush and McCain have given to the rich for the past 8 yrs?

    October 16, 2008 12:54 pm at 12:54 pm |
  25. Irfan Mian

    There is no Joe the plumber......MCcain this is a cheap tactics. Your body language and face impression showed that YOU WERE LYING. Stop lying...this will not put you in white house . I am surprised that a presidential candidate could lie so much and had so low in character.
    How can we trust you, you have not come with ONE STUPID reason.
    OBAAAAAAMMMMMAAAA...... YOU ARE THE MAN..
    I am not a politician...a simple army officer who served with pride and gave his best years to his nation....very proud for my country.

    October 16, 2008 12:54 pm at 12:54 pm |
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