Friday, October 17, 2008

McCain Misleads Self-employed Joe Plumbers

McCain is now brandishing around Joe the Plumber and other small business people as examples to demonstrate how Obama's Tax Plans would hurt small businesses. So here's some factual research from Internal Revenue Service (IRS) starting out with self-employed:

Self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance). McCain is now also misleading self-employed Joe the Plumbers but he's decided to drop Joe Six Packs.

Maximum earnings subject to SE tax. Only the first $94,200 of your combined wages, tips, and net earnings in 2006 is subject to any combination of the 12.4% social security part of SE tax, social security tax.

There are other forms of small businesses such as a partnership or S Corporation. According to the IRS, a partnership generally is not a taxable entity and an S Corporation does not pay tax on its income.

Therefore, it seems that if Joe the Plumber has $250,000 to buy a plumbing business he needs to speak to an Accountant, get the Profit & Loss Statement, client list for the business entity and decide what type of business he would set up in order to determine what taxes he would pay. The real Joe the Plumber, with a license #, runs his business in Amarillo, Texas - does he make $250,000 and if he does, he probably has an Accountant or at least a bookkeeper?

To run on the campaign trail and talk in these general terms as if he would be taxed as an individual on $250,000 while operating a business is not only ludicrous but misleading because no one in his right mind would approach something this important in this fashion.

McCain not everyone is erratic, quick to judge, lack the ability to conduct research on issues, cannot comprehend simple bookkeeping and lacks common sense. Whenever in doubt, seek the advice of an expert on small business such as the IRS and an Accountant not McCain-Palin or Obama.

1 comment:

kiwimeg said...

Good for you getting out the real info on this issue. I'm observing from the safety of New Zealand, but it seems that a lot of people are being unnecessarily frightened by the misinformation being bandied around by the republicans in relation to this issue.