Can somebody check Joe the Plumber’s math for me?

Last night’s presidential debate turned out to be about Joe the Plumber.  An interview has been making the rounds online in which Obama talks to an Ohio plumber, who is considering buying the business he’s been working 12-hour days for over the past years.  Joe says he would be dissuaded from buying it under Obama’s economic plan, where Joe’s tax rate, on his profit above two hundred fifty thousand dollars a year, would increase from 36% to 39%. Or maybe Joe is predicting that, under Obama, he might not be able to borrow money to buy the business.

Check out the original interview here:

I like the way Obama talks to the guy, admits that his tax rate may possibly increase, and gets specific about exactly where it could go up.  He also points out that if his proposed tax breaks for actual working class people had been in effect, Joe might have been benefited — and been in a postiion to buy the business before now, instead of working 10- to 12-hour days all these years for somebody else.

This morning I found this story that said Joe had now decided to vote Republican:

And I thought, well, of course, I could see why he might vote Republican: Joe is rich.  He makes more than twice what my husband and I earn combined. We are way older than Joe, but we put off entering the work force while we were earning Ph.D’s, and we don’t work in nearly as lucrative fields as plumbing.  I’m an English professor.  [P. S.: Good for Joe! I work hard, but I bet I don’t work nearly as hard as he does].

Of course, Joe is rich, but he still might be afraid to vote Republican because, unless he has no 401K invested in anything based in stocks or credit,  but keeps his retirement money in gold bullion under his bed, he might be afraid to keep the financial deregulation that just caused a stock market crash, banking panic, and incipient recession.  But I digress.

This morning, I decided to check Joe’s math.  First of all, he’d have to NET MORE THAN $250K to pay higher taxes on any of it, and as Obama clearly explained last night, his tax raise would entail a rate shift from 36% to 39% — ONLY for what Joe netted OVER $250K!

So say Joe improved his profit margin and went from netting $250K to $275K.  That’s ten percent, a big jump for one year.  Under the current 36% rate, he’d be paying $9K tax on that $25K.  Under Obama’s plan, Joe would pay $9750 on that top $25K.

So, because he’s going to pay an extra $750 on twenty-five thousand dollars extra profit, Joe is not going to buy the business? Is Joe claiming that the extra $750 tax bill is going to prevent him from getting credit?

Has Joe been working so constantly that he has somehow not heard that the stock market has crashed, banks are terrified to lend money even to each other, and so credit is already much, much harder to get and will be for who knows how long?

I’m skeptical, because I can’t see a puny $750 tax increase on income over $250K dissuading me.  Credit is going to be harder to get anyway.

Somebody please explain this to me.

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