Comparing the candidates' tax plans

October 16, 2008 7:33:26 PM PDT
"Joe the Plumber" has become the proverbial little guy politicians like to say they're fighting for. A conversation Samuel J. Wurzelbacher had with Senator Barack Obama this week has touched off a new campaign debate. He says Obama's tax plan will hurt small businesses like the one he's trying to buy, because it makes more than $250,000 a year.

ABC7 wanted to compare which tax plan would benefit small businesses the most, Senator McCain's or Senator Obama's. In California and the Bay Area, there are more people making $250,000 than in Ohio. Along the way, we met another plumber with similar concerns.

"Well this is Mo the plumber," said Maurice Williams, a Bay Area plumber.

Mo meet Joe. They are both plumbers trying to improve their livelihood. Maurice Williams owns Leap Frog Plumbing in Walnut Creek. Mo says staying in business gets harder every year.

"Workman's comp insurance, liability insurance, vehicle insurance, cost of gas and so on, health care. We offer 100 percent health care to our employees, but I don't think that's going to happen next year," said Maurice.

Mo's business brings in less than $1 million a year. That sounds like a lot, but he has six employees and he himself takes home less than $250,000.

"The American dream is to profit when you start a business. This entrepreneurship spirit has gone down the drain. There is no incentive for me to build a business to make $250,000 because I'm just going to get the thumb screws if I do," said Maurice.

Under Senator Barack Obama's tax plan, if "Mo the Plumber" made more than $250,000 his taxes would go up from 36 to 39 percent.

"If your income goes from $250,000 a year to $260,000 a year, you would pay another $300 in taxes. Just on the $10,000," said Ken Jacobs, from the U.C. Berkeley Center for Labor Research.

According to the Tax Policy Center, less than two percent of small business owners make more than $250,000. Obama has promised to reduce taxes on the remaining 98 percent of small businesses.

"In terms of the tax policy, more small businesses would see their taxes go down and they would have larger reductions under Obama's plan than under McCain's plan," said Jacobs.

"Mo the Plumber" says he's letting all of this sink in.

"I'm not asking for any handouts. I just want fairness and I just want something that is going to work and support the little guy out there which is going to support the economy," said Maurice.

By the way, it was George W. Bush who lowered taxes among the wealthiest, but under Presidents Clinton, Bush senior, and Regan, there were tax increases like what Senator Obama is proposing. Senator McCain says he would not increase those taxes.


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