The tax load of Joe the Plumber

[question everything]

From the Wall St. Journal

In Toledo on Sunday, the plumber told Sen. Obama he was hoping to buy the plumbing company he works for, a firm he told Mr. Obama makes between $250,000 and $280,000 a year... Joe could theoretically suffer a tax increase under Sen. Obama's tax plan if he succeeds in buying that plumbing company. The company, A.W. Newell Inc., with two employees, Al Newell and Mr. Wurzelbacher, reported sales this year of $100,000. On sales of that volume, a firm that size could expect to earn about a 6% profit, or $6,000, after salaries and costs are taken out, according to Lee Smither, managing director of FMI Corp., a Raleigh, N.C., management-consulting firm for construction contractors.

The average income of plumbers, pipefitters and steamfitters in 2006 was $48,002, according to the Bureau of Labor Statistics. With income and profits, Mr. Wurzelbacher would be nowhere close to the threshold of $200,000 for individuals and $250,000 for couples for Sen. Obama's proposed tax increase. To reach that level, Mr. Smither said, a mom-and-pop plumbing company like Newell would have to clear $5 million in annual sales.

But if Mr. Wurzelbacher reaped taxable income from his business of $280,000 a year, he'd pay about $900 more a year in taxes under Sen. Obama's plan, which would raise the tax rate on the income between $250,000 and $280,000 to 36% from 33%.

(snip)

On Thursday, Obama campaign aides fought back, saying that if Mr. Wurzelbacher earns the wages of a typical Ohio plumber, $40,600, and holds a $90,000 mortgage, he would see a tax cut under Sen. Obama's plan of more than $1,000, compared with no tax reduction under Sen. McCain's. If he succeeds in buying the plumbing business where he works, he could see even more tax benefits, including Sen. Obama's proposed elimination of capital-gains taxes for small-business investment, a 50% tax credit to purchase health insurance for employees and a $3,000 tax credit for every new hire over the next two years.

From http://online.wsj.com/article/SB122418790649541967.html (subscription)

[Skink]

1. And this guy owes taxes.

Book deal in the works.

[Bozita]

4. He's gonna be a star! Book tour followed by some kinda reality show. Then, ...

... Dancing With The Stars.

[spag68]

2. Plumber Joe

Something is very wrong here. The company reports sales of 100k, but Joe makes 40k. What will that leave for the owner?

[Tansy_Gold]

3. "What will that leave for the owner?"

Maybe an IRS audit?

:shrug:


TG

[Rancid Crabtree]

5. Where's the tax plan?

...not that it's going to make much difference...understanding it would be another matter...but taxes are less for folk in most income brackets in 2008 than they were in 1999...so the $900 more a year seems to be closer to the 1999 figures (forget inflation and cost of living, it's hard enough understanding it at all to begin with)...but I assume the $250,000 figure is on net?...a plumbing company, even more so a contracting company, would have gross sales way in excess of that...figure the cost of one house built and sold...what's the 'elimination of capital-gains taxes for small business investment'?...and why don't they bring back the EnergyStar tax credit that expired last year...seems like that was a winner, all thing considered...

[ColbertWatcher]

6. B-b-but ...

... he's Arab!