Obama/Biden vs. McCain/Palin

[TheoSqua]

the red stars in the background make it even weirder looking

you would notice that

[AJ]

Anyone else voted yet? I did yesterday and there were a ton of people in line, as many as I've seen on a normal election day.

[Leroy]

What is the context for this?

Reminds me of an evolution illustration.

Haha.

[redbirdjazzz]

Will Obama Raise Small Business Taxes?

Fact check: Plumber Joe's taxes
McCain has entrepreneurs spooked about tax hikes, but fewer than 2% of small business owners would pay more under Obama's plan.

(CNNMoney.com) -- In speech after speech, presidential candidate John McCain hammers on the claim that his rival Barack Obama will raise taxes on many small businesses.

At the debate on Wednesday night, McCain said, "The small businesses that we're talking about would receive an increase in their taxes right now."

More typically he has said: "What [Obama] hasn't told you is that he would tax half of the income of small businesses in America," a line used in La Crosse, Wisc., last week.

Should small business owners fear for their wallets if Obama is elected? Not the vast majority, business and tax experts say.

To make its claim, according to a McCain spokesman, the campaign counts as a small-business owner any taxpayer who files a Schedule C, E or F - the forms used to report gains and losses from business ventures and farms.

Using that definition and citing IRS data, the campaign notes that "56.8% of total small business income is earned by businesses in the top two rates, which Barack Obama has pledged to raise."

It's true that Obama has proposed raising taxes on the top two income rates.

But there are three main problems with McCain's charge.

What is a small business?
First, it relies on a broad definition of what counts as a small business, including everyone who files a Schedule C, E and F.

But most people who file those forms don't run a business for a living: Those forms are also used to report income from freelance and consulting work, real-estate rentals, and most other non-salary sources.

For example, McCain and Obama both file Schedule C returns, thanks to their book royalties - but they hardly should be considered small business owners.

In 2005, there were 21.5 million Schedule C returns filed, according to the IRS.

A more realistic definition of small businesses turns up far fewer firms. The Small Business Administration estimates that there were 6 million small businesses in 2005, as measured by those with fewer than 500 employees and with staff on the payroll other than the owner.

Who pays?
Second, even using the broad definition of small business that McCain likes, very few owners would see their own taxes rise.

That's because the lion's share of taxable income comes from a small number of wealthy businesses. Out of 34.7 million filers with business income on Schedules C, E or F, 479,000 filers fall into the top two brackets, according to an analysis of projected 2009 filings by the nonpartisan Tax Policy Center.

The other 34.3 million - or 98.6% - would be unaffected by Obama's proposed rate hike.

That includes Joe "The Plumber" Wurzelbacher, whom McCain invoked nearly two dozen times at the debate Wednesday night to illustrate the plight of the average worker and small business owner.

"Joe wants to buy the business that he has been in for all of these years ... he wanted to buy the business but he looked at your tax plan and he saw that he was going to pay much higher taxes," McCain said.

In an interview afterward with WTOL, Wurzelbacher acknowledged that he'd still like to eventually buy the plumbing company he works for but that he wouldn't yet be hit by higher taxes.

"I want to set the record straight: Currently I would not fall into Barack Obama's $250,000-plus," he said. "But if I'm lucky in business and taxes don't go up then maybe I can grow the business and be in that tax bracket - well, let me rephrase it. Hopefully, that tax won't be there."

Few owners are that lucky in business. In a member survey conducted late last year, the National Federation of Independent Business (NFIB) found that only 14% of respondents said they had $200,000 or more in annual income.

As Tax Policy Center fellow Len Berman recently told Fortune Small Business: "Most owners of small businesses have small incomes."
What gets taxed?
Third, even if you're one of the rare business owners making enough money to be affected by Obama's proposed tax increases, you still won't see a big hike in your tax bill.

McCain's claim that Obama "will increase taxes on 50% of small business revenue" - the line he used in the second presidential debate - is incorrect because of how income is taxed.

If a business owner falls into the top bracket, that doesn't mean that all of his or her income is taxed at the highest level.

For example: If a small-business owner makes $210,000 in taxable income, he edges into the 33% bracket, one of the two top tax rates that Obama would like to raise.

But he would pay the higher tax only on the amount that exceeds the cutoff - in 2007, the two top tax rates applied to single filers with income of $160,850 or more and joint filers with income of at least $195,850. As a single filer, this business owner would see his federal taxes increase $1,475 under Obama's plan, which calls for raising the 33% tax rate to 36%.

"While Obama does favor raising the top two rates, the quote is not true because not all the small business income of those in the top two rates is taxed at the 33% and 35% rates," said Gerald Prante, a senior economist at the nonpartisan Tax Foundation.

The bottom line: McCain's claim only works by using an overly broad definition of what counts as a "small business" - and even with that definition, fewer than 2% of business owners would be hit by Obama's proposed rate increase. For those who are affected, the increase would be levied only on a part of their earnings, not all of them.

CNNMoney.com writer Emily Maltby contributed to this report.

First Published: October 16, 2008: 11:43 AM ET

[heyzeus]

Please read this to learn more about McCain's repeated fanciful claims about the "$3 million overhead projector."

http://www.adlerplanetarium.org/pressro ... debate.pdf

[clement]

That Joe the Plumber has become the poster boy for the hard working American who is being punished by taxes is a joke. If he's really running a business that turns a $250,000 profit, he's not a Joe Plumber. Joe Plumbers make about $40-$50K per year. He's either not making nearly that much in profit, or he's a very profitable small business and should therefore pay taxes like any other person or business owner that's earning a good enough living to be in the top few % in earnings. The only question is how much money does he take home from his business, not how many jobs will he create. If he decides to hire another person, that adds business expense, which is of course eats into profits. You only get taxed on profits not revenues.

And when is somebody going to tell John McCain to stop blaming the financial meltdown on Fannie Mae and Freddie Mac? I've spoken to several different economists and the most any one of them will say is that Fannie and Freddie were small contributors to the problem. They were hardly the root of the problem.

[jim]

Please read this to learn more about McCain's repeated fanciful claims about the "$3 million overhead projector."

http://www.adlerplanetarium.org/pressro ... debate.pdf

I will have to go check it out. It sounds like money very well spent to me.

[PujolJunkie]

I know it's DKos, but rumors are floating that Joe the Plumber is a McCain shtick.

http://www.dailykos.com/story/2008/10/1 ... 191/632401

He is in fact a registered republican though.

Joe the Plumber, the star of tonight's debate, may have a very interesting connection to John McCain. In fact, Joe the Plumber (Joe Wurzelbacher) of Cincinnati, Ohio may be related to one Robert Wurzelbacher of Cincinnati, Ohio, who happens to be Charles Keating's son-in-law.

Robert Wurzelbacher was implicated in the Keating 5 scandal, and sentenced to 40 months in prison in 1993.

Wurzelbacher is also a huge Republican donor.

So, let's find out a bit about Joe Wurzelbacher.



First, he seems to own a few companies:
#1:

Joseph Wurzelbacher (Joseph Wurzelbacher Cnstr Co)
12172 Stone Mill Rd, Cincinnati, OH 45251-4134

#2:

JCC INVESTMENTS INC in the Investors, N.E.C. industry in CINCINNATI, OH. This company currently has approximately 1 to 5 employees and annual sales of Under $500,000.
Location Information Edit
12172 STONE MILL RD
CINCINNATI, OH 45251

#3:

Wurzelbacher Painting
12148 Stone Mill Rd, Cincinnati, OH 45251-4134 (Map)

#4:

Wurzelbacher Brothers
(513) 385-6666
11260 Colerain Avenue,
Cincinnati, OH 45252
Specialties:
REPAIR OF SEPTIC TANKS
Phone: (513) 385-5264

more here:
http://www.dailykos.com/story/2008/10/16/02217/845

[Hungary Jack]

I am not sure the tax argument about Joe's plumbing business fails the sniff text, IMO. First, how many plumbing businesses generate more than $250K in taxable income (profits) in a year? According to the BLS, 12% of plumbers are self-employed. The national average hourly wage for a plumber is $22 per hour, or roughly $47,000 per year. Thus if Joe's plumbing business is a sole proprietorship his annual income/profits will very likely come nowhere near the Obama threshold.

If Joe's business has employees, each employee will cost roughly $55K per year to employ (using base wages and adding employment taxes paid by employers plus some allowance for benefits). This business would have to generate at least $525,000 in annual revenues in order to generate $250,000 in profits. In reality the revenue would have to be considerably higher to account for expenses such as facilities, trucks, equipment, and advertising, all of which reduce pre-tax profit.

On a web site listing businesses for sale, I found 89 plumbing businesses for sale. Of these, 38 reported annual profits in excess of $250K. All but 4 reported revenues in excess of $1M. So perhaps as many as 40% of plumbing businesses might be subject to additional taxes under the Obama plan (this figure is probably very high because the web site will not feature businesses with low profitability).

So I have a hard time buying McCain's posture that Obama's plan will sock it to the little guy. Sole proprietorships and businesses employing a few people will almost certainly fall well below the Obama plan threshold.

[Freed Roger]

I'm not sure how this Obama tax plan all works, nor McCain's - as a CPA I don't bother digesting these tax proposals until they become an actuality - that is, until after they get past both house and senate and their revisions and signed into law.

these obama/McCain tax calculators are just guesstimates. there are too many unknown factors of the plan and each taxpayer to figure tax effects. Basically they are just tossing around tax policy theory as candidates at this point.

That said, Obama did a decent job of discussing his tax policy with Joe Plumber on the trail. Obama woud appear correct, that Joe Plumber's taxes on his entire income wouldn't go up, just the taxes on the portion that exceeds 250,000 (or whatever the theoretical benchmark is at now). Roughly around 3% higher tax on the portion in excess of 250,000.

should Joe Plumber grow a business into the situation, where he makes 250,000+, then that is a good problem to have. He should have the money he needs to deal with additional taxes (with the marginal utility of the dollar and all -had to use hi-falutin words).

Obama pointed out the obvious - that nobody likes taxes. But its also obvious that we have to pay for some things collectively, and the only way is via taxes. Cutting taxes alone will not fix our fiscal budget problems, otherwise the Bush tax cuts we've had since 2001 would have our treasury in high cotton by now.

then there's all the govt spending that shows no sign of retreating under either candidate. (last I checked - Iraq War is considered govt spending)