Small Business, Taxes, and “Joe the Plumber”

Being a small business owner and a supporter of Barack Obama I really want clarification on Joe “the Plumber” Wurzelbacher’s two-hundred and fifty-thousand dollar question.

In the video Joe tells Obama that he is “getting ready to buy a company which makes between $250 to $280 thousand dollars a year.” OK… stop right there, is this gross or net?

As a small business owner you are taxed on your NET profits, not your GROSS. Let’s just make some guesstimates here, say Joe has 2 other employees. If Joe’s business is pulling in $250k a year and you minus expenses, say $45k per plumber, plus the cost of the trucks, gas, health insurance and various other expenses, then Joe might be left with under $100k in taxable salary.

Under Obama’s plan Joe will pay less taxes. This isn’t rocket science and I’m not sure why the difference hasn’t been asked. I blame Obama for not asking the right follow-up questions to Joe.

If Joe is REALLY pulling in NET profits of $260k then I’m going to start learning how to lay pipe!