A business with Net income of $250,000 would cost about 1 million to buy!

[FrenchieCat]

One is buying a client list, a reputation, goodwill, and assets.

$250,000 net taxable income as a Sole Proprietorship is quite a bit. Most companies at that earning rate Incorporate.

In other words, Joe The Plumber is not truly the "working man".

[whistle]

1. Is Joe the Plumber even real?

[FrenchieCat]

2. I think that someone who wants to sell his business showed Joe the Plumber

some cooked books.

[Eric J in MN]

6. Link to Obama talking to Joe the Plumber

http://blogs.abcnews.com/politicalpunch/2008/10/spread-the-weal.html

[elkston]

3. I know, its bullshit. And Obama is assuming that people know the difference

between total revenues and net income.

He did a good job when he talked to Joe the Plumber (for real) explaining that his ENTIRE 280,000 would not be taxed uniformly. The amount under 250K would be the low tax rate, and the amount OVER that would be 3% more.

This detail is lost on many people.

[FrenchieCat]

4. I think anyone watching the Debates are thinking that Joe the Plumber

ain't exactly suffering.

[stillcool]

5. I thought so too..

especially the part where he said something along the lines of if people have no money, you're not going to be doing much plumbing.

[rocktivity]

7. Right--Joe the plumber is NOT an "average joe"

if he is in a position to even contemplate buying a business.

:headbang:
rocknation

[zulchzulu]

8. What exactly would Joe The Plumber be buying anyway?

I'm no accountant, but there were some good questions and info discussed about all this:

There are many factors to consider in this conversation. First of all is Joe a Corporation? If so, a "C" or"S"? Is the income he is referring to gross or net? When he buys the buys the business, what is he buying? Assets? Goodwill? shares of a corporation? The point is, Joe should talk to his tax advisor to determine what his tax situation will be.
(snip)

If Obama raises the marginal tax rate on income above 250,000 to 39% from 36%, the difference in tax paid isn't that much for the plumber. Let's say he's really successful, and makes 300,000 in his new business. His taxes under the current system are 300,000 x 36% = 108,000 so the guy takes home 192,000 - a nice sum.

Under Obama's plan, his taxes would be 250,000 taxed at 36% and the next 50,000 taxed at 39% for a total tax bill of 109,500 -- an increase of 1500.

The plumber still takes home 190,500. It doesn't seem to me that $1500 is enough to discourage the plumber from doing better for himself and his family. Agreed, it isn't a trivial amount, but not enough to make him pass up buying the business he's considering.

Put another way - his average tax rate would rise from 36% to 36.5%... it's just not that bad.

http://blogs.abcnews.com/politicalpunch/2008/10/spread-the-weal.html