Paul L. Caron
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Saturday, November 1, 2008

Thompson Presents Joe the Plumber and the $4.60 Progressivity Debate at Penn State

Samuel C. Thompson, Jr. (Penn State) presented Joe the Plumber and the $4.60 Progressivity Debate at Penn State this week as part of its Issues Forum.  Here is part of the Introduction:

Senator McCain has used Senator Obama’s conversation with “Joe the Plumber” as the basis for the assault on Senator Obama’s plan to increase taxes on those making more than $250,000 while at the same time reducing the taxes of middle class taxpayers. Although Joe is in the middle class, he has said that if he is successful in buying a plumbing business and making more than $250,000, he does not want Senator Obama taxing him at a higher rate. ...

As a result of Senator Obama’s discussions with Joe, Governor Palin has referred to Senator Obama as a “socialist,” and Senator McCain has referred to him as the “Redistributor-in-Chief.” Surprisingly, these pejorative labels are directed at a policy that would reverse tax cuts for the wealthy enacted at the urging of President Bush and initially opposed by Senator McCain who said the following in 2001: "I cannot in good conscience support a tax cut in which so many of the benefits go to the most fortunate among us, at the expense of middle-class Americans."

What would happen to Joe if he were successful in buying the business and making over, say, $350,000 per year? Under the current Internal Revenue Code, for each $100 Joe earns over $350,000, he would pay a tax of $35. Under Senator Obama’s tax plan, for every $100 Joe earns over $350,000, he would pay a tax of $39.60. Thus, Senator Obama’s plan would tax Joe an additional $4.60 for each $100 Joe makes over $350,000, and this $4.60 is the basis of the argument around Joe the Plumber.

For a copy of Sam's PowerPoint presentation, see here.

https://taxprof.typepad.com/taxprof_blog/2008/11/thompson-presents-joe-the-plumber-and-the-460-progressivity-debate.html

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The presidential election clock is ticking down. You know what that means. We're running out of time to look at Joe the Plumber's tax bill! Last week, Samuel C. Thompson, Jr., professor of law at Penn State's Dickinson School of Law and founder and dir... [Read More]

Tracked on Nov 3, 2008 6:32:33 AM

Comments

Thanks for those numbers and that is interesting. Someone unfortunately though has to pay high taxes and I really don't see a problem with those that are fortunate enough to be making 350 k a year paying a bit more. There are just too many people right now struggling as is to make ends meet. In a perfect world no one would be taxed and all government programs would pay for themselves but that isn't the case.

Posted by: Tim | Nov 1, 2008 11:32:47 AM

This argument assumes that we believe Sen. Obama and a Democratic Congress will stop with the tax increases he has proposed.

I don't.

Posted by: David Adams | Nov 1, 2008 3:35:56 PM