Wednesday, October 15, 2008

Joe the Plumber can't afford a $250K business because of $600 in tax?

Tonight during the debate, Joe the Plumber became a topic more often than I cared to hear. The part of it that really sounded absurd was the notion of Joe can't afford to buy the business because of the increase in taxes.

During the discussion between Joe the Plumber and Obama, Joe mentioned that the business makes about $270K per year. As Obama stated, the first $250K would stay the same. It is only the additional $20K or so that would be taxed at a rate 3% higher. If you figure that out, a 3% increase on $20K comes to $600.

So let me get this straight. You may not be able to afford to buy a $270K business because of a $600 tax increase? If that's the case, something is really wrong in the financial management here. If you can't handle a tax increase of 0.2% (which is how much $600 on $270K works out to)...if that's the deal breaker for you, then I've got news to give you. Something else has gone WAY wrong, and that something else is obviously the deal breaker.

In addition, as Obama mentioned, that $600 may be more than offset by Obama's other credits for health care expenses and capital gains reductions. (Edit: Not to mentioned the possibility of increased revenue as his customers have more money to spend due to their tax decreases)

1 comment:

jim said...

Joe is a plant. This business is making 280K gross per year? After expenses, (pipes, gas, office, payroll) that's maybe 80K? 30K? Less? He's not buying a busness. He's shilling for the McCain campaign.