Joe the Plumber Doesn't Know Jack About Taxes

Being a tax geek, I was perplexed at the statements Joe the Plumber, a small business owner, has made about his plumbing business. Joe the plumber originally met Barack Obama in Joe's neighbor's yard in Ohio. Joe asked Obama a "tough question" along the lines of, "I'm a small business owner; if you get elected, will you raise my taxes?"

Obama's response, basically stating that his tax plan calls for tax cuts for everyone who earns under $250,000 per year was apparently confusing to Joe the Plumber. Does Joe, who is in fact an unlicensed plumber in rural Ohio, really earn more than that? Not likely. Still, Joe has been unleashing comment after comment to the national media, implying that Obama wants to raise Joe's taxes. Untrue!

What's worse is that John McCain is playing on Joe's (and America's) tax ignorance in saying that Obama's plan will raise taxes on small businesses, which is a flat-out lie! The vast, vast majority of small businesses are sole proprietorships and partnerships, which are flow-through entities. Flow-through entities are not taxed at all; rather, the earnings flow through the entity to their respective owner(s) and the owner simply pays individual income taxes on the earnings.

From "Compare Obama and McCain's Tax Plans"
"Bottom Line: Make LESS than 250,000/year or do not have health insurance, tax wise, and health insurance wise, you will be better off under Obama.

Make MORE than 250,000/year and do not have to worry about health insurance costs, you will be better off with McCain."

I realize there are other reasons why people vote the way they do, but the part of your vote concerning your personal finances should be clear based on the above.