Is Joe The Plumber's $250,000 a year net or gross income?

[Elwood P Dowd]

Considering the neighborhood he lived in, I'm thinking that was a small company with a $250,000 a year gross. Why didn't someone explain to Obama the difference?

[SheilaT]

1. At a debate watch group I was

with, during the discussion afterward, a man who said he was an accountant indicated that the $250,000 would be net profit, so there'd probably be as much as $5,000,000.00 (that's five million dollars) of gross receipts.

I'm not an accountant so I have no clue if that number is remotely correct.

[napi21]

5. I am an accountant and I think that's an extreemely low profit margin.

Most small businesses don't operate on a small 5% margin. It's much larger than that. In all fairness, even if Joe the plumber was talking about profit, no matter what the margin is, that's really not a bad income! I wish I could have that much!!!!

[SheilaT]

15. What is likely to be his gross

if he nets $250,000?

Several years back my Merrill Lynch guy was complaining about his taxes, and I told him that if he felt he paid too much, then he should just reduce his income. The idea that he still took home a heck of a lot more than most people somehow didn't register.

[endthewar]

18. Agreed, it's probably around 2 million gross or so

maybe a shade lower. If it was 5% profit, then why have the business at all? You could just put the money in a savings account or some other type of investment to get that kind of yield.

[Rosa Luxemburg]

30. you don't believe this GOP drivel do you?

[On the Road]

2. I Think Obama Didn't Want to Get into Minutiae

although it might have helped him. I'm sure he knows the difference.

Of course, it's possible that if Joe has a bunch of employees and a fleet of trucks, he might gross net $250k.

[Elwood P Dowd]

4. You mean net.

Gross is total income before expenses.

[On the Road]

7. Thank You

Fixed.

[Elwood P Dowd]

12. No problem. I smell a rat named Joe.

What are you smelling?

[sandnsea]

3. It was one guy

who indicated that was his income and Obama's tax would hurt him. It was a gotcha game. People can either accept the reality that we have to pay the bills, or let the debt keep rising.

[qanda]

6. There's more to Joe than meets the eye

I know a lot of plumbers and none of them have enough to buy a business worth that much. Something stinks and I have a feeling DU is going to sniff it out.

[iceman66]

8. Assuming his story was even true

he did not provide enough specifics to tell one way or the other.

I suspect that it was just a BS story that he told to try and trip up Obama.

[Elwood P Dowd]

11. I wouldn't doubt it.

We need someone to check out this so called business venture. Asked him if it gross or net. Ask him how many employees they have and what was their net margin last year.

[Viking12]

9. The $250K is Hypothetical.

Joe thought he might want to buy the business someday soon.

[sfam]

10. Dammit. I'm quitting my day job to become a plumber if its 250K profit!

[WallStreetNobody]

13. It doesn't matter, it's $900 and probably less

He said his business would make $250k-$280k per year, assuming the high end of $280k he would pay an extra 3% on that last $30k for a total of $900. If he is giving his employees any health insurance he would get a 50% deduction on those costs as well, plus Obama is ELIMINATING CAPITAL GAINS TAXES FOR SMALL BUSINESSES UP TO $500K. That is huge, that means if Joe's business grows and he sells it for a $500,000 profit he would save an extra $75,000 because the current cap gains rate on it would be 15%.

The fact is in all likelihood Joe the Plumber would do better under Obama's plan. And the biggest point Obama brought up to him was that in all these previous years when Joe the Plumber was not making $250k, he would have gotten a bigger tax CUT under Obama so would have been able to buy this business earlier.

[JimWis]

14. When Barack talked to Joe, he did say to Joe that he would need

more detail to really answer him correctly. There wasn't time. Obama just chatted with the guy a few minutes on the street, with people all wanting to talk to him also. I'm sure it would depend on what type of business entity he had. Corporation and drawing a salary? Sole Proprietor? - and all that. I would bet he would still be ahead with Obama's plan.

[LiberalAndProud]

16. Neither. It's imaginary income.

Joe hopes to buy a business some day. He's imagining that he'll some day make over $250,000, or win the lottery.

[TexasObserver]

17. Neither. He doesn't even own a business. He works in a two man shop.

He's the second guy, and wants to buy the business.

He has no idea what he's talking about. He thinks that some day he may buy a business, and some day he may make $250,000 in gross revenues, but he has no idea what that means for taxes.

[Eric J in MN]

19. Did he say somewhere that it's a two-man business? NT

NT

[TexasObserver]

20. yes

[TexasObserver]

27. somewhere here is a post by The Magistrate with a link to an interview the guy gave

don't recall which thread

sorry

[Papagoose]

23. Thats kind of what I was thinking

I don't think Joe understands the difference between revenue and margin. I work for a company with projected revenue of about $20 million this year. We won't come close to netting $250K this year. I think people grossly overestimate how much money their company will actually make.

[JBoy]

21. His income would be zero. Joe has no business plan, no clue, and would go bankrupt.

[izzybeans]

22. If that's how much he makes then fuck him and his crybaby attitude.

If your a down on your luck plumber. Do you need to buy a business? Why not start when with $100 advertisement, a spot in the yellow pages, and your handy-dandy tools like real plumbers do?

[Occam Bandage]

24. There isn't any $250,000. This was all a "hypothetical." That is to say, he lied his ass off.

[yellowcanine]

25. Neither. He WORKS for a plumbing business. He doesn't OWN it. Just WANTS to.

[realitythink]

26. Listen... I own a small business

And I can tell you if I was taking home 250K after I paid all my bills (which is completely unrealistic in my business) my accountant would shoot me. This whole story is complete horseshit. Any plumber taking gross reciepts of 5 Million is not going to sell that business. That's 96k a week. How does a two man operation do that? Impossible.

[TNMOM]

28. neither. he made $40K in 2006. he's a liar --

there's a link to the Toledo Blade story in a thread upstream.

[Yes We Did]

29. Correct! It's non-existent

beat me to it! :evilgrin: