Sunday, October 26, 2008

Remember the Bud WAZZZZZZZZUP commercials?


Obama Version:

Joe the Plumber and business taxes: They're all getting it WRONG!

The "Joe the Plumber" argument is that "Joe" is going to buy a business that is making $250-$270,000 a year and that Obama's tax plan is going to tax him more. What amazes me is that Obama, McCain and many pundits are really missing the boat on how business taxes actually work.

A business who generates $270,000 a year (generally) refers to gross income of the business. Business taxes are in no way connected to the gross income!

"Joe" has expenses such as payroll, trucks, insurance, etc. These expenses reduce his taxable income until at the end of the year - he either shows a profit or a loss. THE PROFIT OF THE BUSINESS is what gets taxed. NOT THE GROSS INCOME.

So, if Joe is an awesome businessman - he'll show a 30% profit and pay taxes based on $75,000 - which is well within Obama's tax cut for the middle class.

Lastly, McCain keeps saying that if Obama increases taxes on these businesses (which we know he won't now - but lets play along), that millions of Americans will lose jobs because if the company they work for has to pay more in taxes - they will cut jobs.

Stop it. That's exactly like saying that because I am going to get taxed on my next pay check that I don't want my next pay check. Come on! Even if some individuals end up (those making $250k and up) paying more in taxes - do you honestly think they'll stop earning money because of it? Of course not!

This argument is illogical and is fear mongering. It's simply meant to scare people who don't understand.