I'm not sure "Joe the Plumber" should be running a small business....he doesn't understand how

[Bread and Circus]

taxes actually work. From my reading of "Joe the most famous plumber in the Universe's" comments both to Obama and after the debate is that he doesn't really understand the difference between Gross Income, Net Income, and Taxable Income.

My sense is that he has been an employee for many years, perhaps a good one, who finally is looking to take over the reigns of the company he works for. I wouldn't be surprised that the company he seeks to buy grosses well over 250K per year. However, I highly doubt (unless he's running multiple teams) he personally is going to be clearing 250K per year net. Furthermore, if he were at all savvy, he would know how to bury his income and reduce his tax burden in a variety of ways that continue to pay his personal bills but grows his company.

I'm kind of flummoxed that Obama didn't just straight up ask him what his take home will likely be ballpark. I'd expect it to be between 60K to 150K high end. In which case, he'd be better off under Obama. If that guy said 250K, he'd be in the league with radiologists, cardiologists, and orthopedic surgeons and I'd really have to see his numbers to believe him.

250K income is 5K per week take home before taxes. Who here knows a plumber from Toledo making 250K+?

I come from a long line of plumbers, roofers, and contractors that own their own companies and run teams in areas just like Toledo. As far as I know they aren't in the 250K crowd and live like they are in the 65K crowd.

Now, if that guy is pulling down those kinds of numbers as the head of that business a couple things would also be true. One, he wouldn't be hurting by anyone's stretch of imagination and Obama's tax schedule wouldn't likely prevent him from doing his thing. Two, he would be running a possibly multi-million dollar business. In which case, he wouldn't be asking such dumb questions of Obama as if he didn't know how taxes work.

On this one, my feeling is as I originally stated: Joe the Plumber probably doesn't know how taxes work and is confusing gross with net income and doesn't understand how as a business owner you can vastly reduce your taxable income depending on how you structure your company, capital investements and the like.

I only wish Obama had probed him further to nail this down before it became the big bag of stupidity McCain, and the media, will continue to make it.

[JohnnyRingo]

1. My sense is he just inherited a bunch of money

Either his parents owned the plumbing company, or left him enough to buy one.

If the company earns the kind of net he claims, it's not two guys and a plunger. It's a multi million dollar company with a small fleet of trucks and a decent payroll.

No one gets that kind of leverage by keeping their noses to the grindstone, and saving some of their paycheck in this economy.

Something smells here and believe me, there's gonna be "leak" out of this plumber story. I can't wait.

[ThoughtCriminal]

2. Hard to stay in business

even the plumbing business if you do not understand the difference between gross receipts and net income.

[Oak2004]

4. Or for that matter don't know how to use the trizillion loopholes that let you avoid taxable income

When I had a business I was, to put it mildly, shocked at all the little entirely legal cubbyholes that turned real money that, as a retailer, I could hold in my hand, into not-real-money for tax purposes.

While the other side of the coin is that self-employment comes with precisely zero job security, poor odds of success, and it eats every waking hour of the day, even dinky little businesses have access to deductions wage slaves can only dream of. Even my vacations became largely not-real-money by matching them to out of town trade shows.

If a small plumbing outfit that grosses $250k can't find enough deductions to insure that the owner has a much much lower taxable income, that owner is clueless.

[LynnTheDem]

3. I'm sure being a relly of Charles Keating means he doesn't need to.

Cheatin' is the Keatin' way.

[mwdem]

5. but, doesn't he belong to a union?

...just saying...

[Xithras]

6. I know lots of business owners who are really bad with numbers

Lots of business owners are successful simply because they hire good employees who keep things running for them. As some rich guy once said, the true secret of success is to hire people smarter than you are.

This is why the FSM blessed us business owners with accountants.

[Emit]

7. Bread and Circus

You bring up some excellent points -- I discussed this very thing with a group of canvassers a couple of weeks ago. In my job, I review a lot of tax returns and some business profit and loss statements, etc. I've seen folks claiming a taxable income of $30K or less when their business is grossing much more (in one case, I've seen a guy claim an income of $14K, when his business grossed almost a million bucks).

[elkston]

8. My sense is that Obama didn't probe further because he wanted ..,

to give the guy the benefit of the doubt. If he started asking probing questions maybe he was afraid he'd start sounding condescending, etc.

He assumes the average joe has command of the details when its not necessarily evident.

[TexasObserver]

9. Joe is the classic example of a guy who ought to pay someone else to do his taxes.

He may be a great plumber, but if he thinks he's making $250,000 INCOME, he's out of his god damn mind. Even if his business is grossing $2 million a year, he should not be showing that much income. There's a reason people with strong cash flows get accountants. Failing to do so is penny wise and pound foolish.

Hell, he could probably swap out plumbing work for the CPA work, and if there's no 1099 on it ....

[Bread and Circus]

10. No doubt...

[SidDithers]

11. Exactly. Just look at the threads about Todd Palin's income tax returns....

he's a small business owner (fishing and snow machine racing) that grossed ~$65,000, but claimed a taxable income of ~$15,000. (numbers from memory, and I'm too lazy to go look 'em up again. someone will correct me if I'm significantly wrong :))

Joe the Plumber should be doing exactly the same thing. And if his taxable income is still over $250,000, then his business is big enough that he should be paying higher taxes and health insurance benefits for his employees.

Sid

[Bread and Circus]

12. vindicated....

http://www.huffingtonpost.com/2008/10/16/joe-the-plumber-is-it-see_n_135211.html

Already, however, there is some dispute as to whether or not Wurzelbacher was being accurate with his critique of Obama. His business, as ABC reports, would almost certainly get a tax cut under Obama's plan, given that he does not expect to make anywhere close to $250,000 in profits.

[Lex]

13. Exactly. Joe is a Republican dumbass who doesn't understand the basic

difference between gross and net profit.

That is pathetic.