How much would Joe the Plumber's Taxes Change?

Puppycow

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Puppycow
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Supposedly, the business that Joe the plumber wants to buy is expected to make $270,000 in profit.

According to my back-of-the-envelope calculation (I don't know anthing about special deductions or exemptions) Obama's tax plan would raise the marginal tax rate on income over 250,000 from 36% to 39% (which is what it was in the 90's before the temoprary Bush tax cuts (actually he would just let those expire as scheduled, which is not really a raise, is it?)). So for Joe, that would raise his taxes by $600. How onerous is that? It's about 0.2% of $270,000.

This is going to put him out of business? BTW, if he really makes that much profit each year, he could be a millionaire in a few years.

If anyone find a more rigorous analysis by someone with better data, please post a link to it here in this thread.
 
Puppycow said:
Supposedly, the business that Joe the plumber wants to buy is expected to make $270,000 in profit.

According to my back-of-the-envelope calculation (I don't know anthing about special deductions or exemptions) Obama's tax plan would raise the marginal tax rate on income over 250,000 from 36% to 39% (which is what it was in the 90's before the temoprary Bush tax cuts (actually he would just let those expire as scheduled, which is not really a raise, is it?)). So for Joe, that would raise his taxes by $600. How onerous is that? It's about 0.2% of $270,000.

This is going to put him out of business? BTW, if he really makes that much profit each year, he could be a millionaire in a few years.

If anyone find a more rigorous analysis by someone with better data, please post a link to it here in this thread.
Click to expand...


It's seems to be an absolutely irrelevant amount of money for those
who earn 250,000 a year. This is the closest Article I found yet regarding
the details:

http://www.boston.com/news/nation/a...ns_in_hand_ohioan_becomes_campaigns_everyman/

Plus what Joe Wurzelbacher and Obama actually said in their little conversation:

http://us.cnn.com/video/#/video/politics/2008/10/15/sot.obama.joe.the.plumber.cnn
 
According to my calculations, on an income of $250,000 in the year 2000 Joe the plumber would have had $78,051 in tax liabilities and $65,682 in 2008. Assuming that the Bush tax cuts expired, that is the margins were reset to their pre-cut rates, there would still be large differences in tax credits and deductions. We're not even considering here that that Congress will ultimately shape any changes in the federal tax code and while the President certainly has input, it will almost certainly vary a great deal from either candidates proposals.
 
If I was the Obama campaign I would counter Joe the plutocrat plumber with somebody in the middle class. Sally the nurse or Jim the carpenter making around $60 K. For every Joe the plumber there are probably 10 or 20 people making less than $100 K.
 
When I listened to this, all I could think is that if a plumber makes $270k a year, I'm in the wrong business.

But it is true that in the current economic atmosphere, if the average person had a plumbing problem, they would go to extraordinary lengths to avoid the expense of a plumber. I know...I've been there. I replaced all the drain pipes under my 40 year old house myself. I earned my plumber's crack!!

In an atmosphere of economic growth and expendable income, the average person is less likely to be inclined to spend the time and energy to take the matter into their own hands when they can pick up the phone and have the problem solved by an expert with much greater convenience.

It makes sense to me...am I wrong?
 
Puppycow said:
.... Obama's tax plan would raise the marginal tax rate on income over 250,000 from 36% to 39% (which is what it was in the 90's before the temoprary Bush tax cuts (actually he would just let those expire as scheduled, which is not really a raise, is it?))
Click to expand...

Let me see now. Before the tax cuts expire, and after they expire, is he paying more or less tax afterwards? Answer = more.
Is that a raise in tax rate? Yes.

Brought to you by the new crack Obama-math "spread the wealth" team.

Hopeless Change '08.
 
plumjam said:
Is Joe The Plumber the same Joe as Joe Sixpack, or is that a different Joe?
Click to expand...

Joe Sixpack was born in the US. Joe The Plumber was born in warsaw. Although if plumbers can earn $270K in the US no wounder all the poles keep going home.
 
Canny political move - picking a "blue collar" occupation that is very well paid to give the impression that the "average Joe" (Joe Sixpack's younger bother) is going to be hit by tax rises.
 
In the UK I think the average salary for an qualified and experienced plumber is around the £30,000 mark.

ETA: No idea of the reliability of this site but it says "The median expected salary for a typical Plumber I in the United States is $36,440."
 
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Joe just needs to hire a better accountant. It should be pretty easy to ditch $20,000...

Me thinks Joe is some stooge, that has no intension of buying this 'business'.

He's all over the morning news shows, and I think FOX might even offer him a show.
 
I just want to again point out, as a small business (part) owner myself, what the business makes is not Joe's income, unless Joe is a complete moron who shouldn't be running a business by himself anyway.

If Joe is in anyway a smart man, he will draw a salary in the tax bracket of his choice and his business have a net profit of as close to $0 as possible.
 
Darat said:
In the UK I think the average salary for an qualified and experienced plumber is around the £30,000 mark.

ETA: No idea of the reliability of this site but it says "The median expected salary for a typical Plumber I in the United States is $36,440."
Click to expand...

That would be if you work for Joe, maybe.
At the bottem it says:

If you are a self employed experienced licensed plumber you can charge between $35-$150 per hour, depending on which part of the United States you live. In larger cities the rates are at the highest end of the spectrum. I believe Boston plumbers charge over $125 per hour. Mid Coast Maine is between $45 & $75 per hour.
Click to expand...

Back of the envelope again, but if Joe charges $125/hour and works 2000 hours/year, that would be $250,000 before expenses. $300,000 if he charges $150/hour. Wonder what his overhead would be though.
 
Upchurch said:
I just want to again point out, as a small business (part) owner myself, what the business makes is not Joe's income, unless Joe is a complete moron who shouldn't be running a business by himself anyway.

If Joe is in anyway a smart man, he will draw a salary in the tax bracket of his choice and his business have a net profit of as close to $0 as possible.
Click to expand...

Meaning, maybe, hire more employees? If so, the Obama tax plan will have the effect of creating jobs, no?
 
SnuggleSmacks said:
When I listened to this, all I could think is that if a plumber makes $270k a year, I'm in the wrong business.
Click to expand...
Of all the trades, plumbers make the most. Of course, they also have to spend a certain amount of time wading in streams of feces...

And laws make it tough to actually become a licensed plumber. In Chicago, for example, you have to work for a licensed plumber a minimum of 8 years as well as take a certain number of hours of classroom education. And then the licensed plumber you worked for has to sign off on you, and of course they're not likely to sign off on that (unless you're a close relative) so you can then compete with them. More likely they'll let you use their license to pull permits, at a fee of $300-$600 a pop.

These rules don't guarantee competence of course, just cronyism and exhorbitant prices. Woe to the landlord who gets written up for a bad faucet which he could replace himself for $50 but now has to spend nearly $700 to have a licensed plumber pull a permit and do it. And yes, I've seen actual instances of this.
 
Joe is either a liar or just really really bad at math! I lived in OH a few years back and while costs are less in OH then MA where I live now so is pay.

I am looking at a doc for a local city RFQ which lists all the prevailing wage requirements for all trades. Plumbers and pipe fitters are scaled at $56-$58 per hour.

If Joe works 60 a week and takes NO vacations he would make $181K and little more for overtime. But we all know that that isn't really realistic!

This is PRE tax dollars and assuming that there is no health care taken out of his paycheck.
It also makes Joe a FAR MORE than average middle class.

Now this is straight salary so it really isn't exact since Joe wanted to own the business and is claiming that he will make $250K profit!

Assuming a 50% gross profit and a billable rate of $200 which is totally unrealistic
Joe would have to put in a 2500 hour year. That translates into a 48.8 hour work week that is ONLY counting actual time billed and also assumes that Joe has no employees, and hasn't paid a whole page full of stuff that is involved with owning and running your own business and does it ALL by himself.

Now all of this IS possible and people do actually do it, but it puts them into a category OTHER than average middle class.

So, again, Joe is either lieing, stupid or a chill for the republicans.
 
Joe the Plumber, like Bristol Palin, will probably come to resent being thrust into the national spotlight by the McCain campaign.
 
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