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The (Un?)Importance of Joe the Plumber

By Bizbox

If you watched the third and final presidential debate, you may have been forgiven for thinking that one of the candidates was named Joe the Plumber--so frequently was Ohio resident Joe Wurzelbacher referred to. The story is that Wurzelbacher approached Sen. Barack Obama a few days ago and confronted him on the fact that, under Obama's tax plan--which would cut taxes for those making under $250,000 but let expire the Bush tax cuts for those making more than that (effectively raising their income tax rates)--he would likely be subject to a higher tax rate should he go through with his plan to buy a small business for somewhere in the neighborhood of $275,000. Obama conceded this reality while defending his plan, listened to Wurzelbacher advocate for a flat tax--at which essentially everyone would be subject to a common tax rate--and wished him well.

At the debate, Sen. John McCain pointed to Joe the Plumber and the others like him as a reason for why his plan to cut everyone's taxes is superior to Obama's, particularly from the perspective of--yup--small business owners. The "others like him" is crucial: Wurzelbacher may be a voter in Ohio, but he's only one voter in Ohio, and so presumably the important question is whether there are others like him, that is, other similarly situated entrepreneurs (and anyway, any proponent of a flat tax--a policy that would by definition eliminate progressive taxation and is therefore the reserve of strong economic conservatives--is likely to be a McCain voter anyway). Well: are there others like him? Are there, as McCain said, "millions of others" like him?

The New York Times delves in, and the answers, in short, are: not many, and probably not. "There are fewer than six million small businesses that actually have payrolls," the paper reports, citing Small Business Administration data. "The rest are so-called nonemployer firms that report income from hobbies or freelance work done by their registered owners, earning as little as $1,000 a year. Of these, according to a calculation by the independent, non-partisan Tax Policy Center, fewer than 700,000 taxpayers would have to pay higher taxes under Mr. Obama’s plan. But even some of these," the Times adds, "are not small-business owners in the traditional sense; they include lawyers, accountants and investors in real estate, all of them with incomes that put them in the top tax brackets."

None of this is to suggest that small business owners who make under $250,000 now ought to vote for Obama; nor, for that matter, that those few who do make over that amount--and would, if Obama enacts his tax plan, see a small rise in their income tax--ought to vote for McCain. Best to point out that both candidates recognize the engine of the nation's economic (and particularly job) growth that small businesses represent. In other words, though their policies most certainly do differ, both candidates at least appear to have small business owners very much in mind. Certainly that should be of comfort as Election Day approaches.

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