Throughout the campaign John McCain has been trying to mislead the voters by falsely claiming he would lower their taxes and Obama would raise them. When objective data proved that McCain was wrong, he tried to get away with using a partisan Republican known as Joe the Plumber as a source during the last debate. While Joe claimed that Obama’s plan would raise his taxes, he was wrong. Now he has finally admitted it. CBS News reports:
Sen. John McCain then used Joe’s story to claim Obama will raise taxes for millions of small business owners.
“And what you want to do to Joe the Plumber and millions more like him is have their taxes increased,” McCain said during Wednesdays third and final presidential debate.
The fact is, millions will not be hit by a tax hike. An estimated 335,000 small business owners – just 2 percent of the total – would be impacted by Obama’s tax increases.
According to the nonpartisan Tax Policy Center, Obama’s tax hikes apply only when personal income, not the value of the business, rises above $250,000.
“What goes on your income tax form is your profit, not your gross receipts,” said Eric Toder of the Tax Policy Center.
So today, Joe, who said he makes much less than $250,000, reluctantly admitted Obama would lower his taxes.
“I would, if you believe him, I would be receiving his tax cuts,” Wurzelbacher said.
Joe would pay less in taxes under Obama’s plan than under McCain’s as he makes much less than $250.000. But what of those who do make over $250,000? McCain has really manged to get many of them scared that they will pay more in taxes, but the amount is far less than they are led to believe. Bloomberg reports that even if Joe did make $280,000 per year his taxes would only be $773 per year higher under Obama’s plan, and most small business owners don’t come close to this income level:
One other problem in making Wurzelbacher a symbol of the overtaxed: he would pay just $773 more in taxes under Obama’s plan than McCain’s if he did earn an adjusted gross income of $280,000, according to an analysis by the Tax Foundation, a Washington research group that is critical of high taxes.
Earning that much would make Wurzelbacher very unusual among small businesses. According to the Internal Revenue Service, most small businesses organize in ways that allow their owners to pay taxes at personal rates rather than as corporations, which impose a second layer of taxes. Almost 95 percent of 21.5 million owners of small businesses who file as sole proprietors had receipts under $100,000 in 2007.
Another 4 million businesses organize as so-called subchapter S corporations, according to IRS data; less than 5 percent of them earn more than $200,000.
Now that Joe got this straignt, I wonder if Joe, along with John McCain, will stop distorting Obama’s response about spreading the wealth around. Obama was not arguing for redistribution of the wealth as Republicans are twisting this. Taxes under Obama even for those making $280,000 per year would be less than they were under Ronald Reagan, hardly making Obama a socialist.
Obama was simply making a point which should be obvious. Giving the middle class a tax break and putting more money in their pockets will give them more to spend on businesses such as the one Joe wants to buy. As a small businessman myself, I have no doubt that Obama is right about this.
