Abe the Accountant

The tale of Joe the Plumber got me thinking about a conversation I once had with Abe the Accountant.

Years ago, when my salary increase caused me to pay higher taxes, I complained to my accountant. Abe, my accountant, told me something simple. "Be happy you're paying taxes," he said. "What? Why would you say that?" I asked. "Because it means you're making money" was the answer.

It is an indisputable fact of citizenship that if you have an income, you will have to send some of that income to the government to help pay for roads and the army and emergency services and such. Most people accept this. They're happy to get richer, even if it means they'll pay more tax. Since neither candidate this year is suggesting the complete elimination of taxes, the best we can hope for is that they tax us equitably.

For the last thirty years, Republicans have been shifting the tax burden from the richest people in this country to the middle and lower classes. The result has been an almost unprecedented division in wealth between the top 1% of earners and everyone else. Barack Obama has proposed correcting this. As a result, Republicans, like they did to Al Gore and John Kerry before, are accusing the Democrat of "class warfare."

As America's wealthiest person, Warren Buffett, once said, "There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning." The preceding link, by the way, will take you to an article written by, of all people, conservative Republican Ben Stein, in which he also argues for higher taxes on the rich.

Joe the Plumber, on the other hand, likes things the way they are. He thinks that increasing taxes on the very wealthy will be damaging to the economy, even if it means lowering his own taxes. So, where Barack Obama has Warren Buffett as an advisor, John McCain is taking his lead from Joe The Plumber. I'm going with Warren too.

Our economy is slipping into recession and the middle and lower class are being crushed by the weight of it. They need tax relief. At the same time, we have a $10 trillion debt. We have enormous bills to pay. Money has to come from somewhere. Obama wants to move the top tax rate from 35% to 39%. It's what it was before George Bush. It didn't hurt the economy then (anyone remember the Bill Clinton years?) and it won't hurt it now. If it restores fairness to the system and gives everyday Americans more spending money, it's a good thing. John McCain and Joe The Plumber can call that "redistribution of wealth" if they want. I call it a return to sanity.

Read more about the failed "trickle down" economics of Bush and McCain

Hear another Plumber's take on the election

Comments

[WASanford]

What most of these small (and large) business owners overlook is that without customers their business's are cooked. No taxes, no customers, no business! If all of Joe Sixpack's money goes to pay his taxes, who is going to come into their stores to buy whatever they're selling. We're all in this together and we have to treat one another fairly if not equally. If we don't, none of this will work.

But it's worse than that! The concentration of money into a few hands also concentrates power into those hands and that's dangerous to our democracy. That's why I think we should take a higher percent of income as taxes as income goes up. Especially when we're talking about incomes in the tens of millions of dollars.

[elizaconnors]

The majority of small business owners that have been on the news lately (including Joe) mistakenly believe that Obama will raise their taxes if they have revenues of over $250,000, not taxable income over $250,000.

In order for a small business to make $250,000 in taxable income with an 12.5% after-tax return on sales (fairly high depending on the business) revenues would have to be $2 million (give or take a bit). Do these folks who are complaining have $2,000,000 of small business revenues? In a word, no. They just don't understand how their businesses are taxed. After years of doing small business tax returns, I can safely say that this is not an uncommon phenomenon.

Don't get me started on the misunderstood, but extremely important, concept of marginal tax rates.

We know that, in general, Americans are bad at math and really aren't into understanding complicated concepts. This puts the Obama camp in a difficult position. If the camp wants to make the policy clear it is going to have to find a simple way to explain how small businesses are taxed.

That will be a tough thing to do this late in the game. I would start by saying, "Take all of your sales and deduct all of your expenses, including depreciation and insurance and home use deductions and wages for people that work for you and taxes on wages. Is this amount more than $250k? No? Good, your taxes will not go up."

[JBS]

Actually, if we want to go back to the Golden Age of the American Middle Class, then the top rate should be 91%

[GregJL]

Wouldn't it be nice if all progressives started speaking and writing on their own terms, instead of meekly accepting the frame of the conservative blowhards?

[LeftRight]

One could hope..... Don't think that it's going to HAPPEN, but I do have a glimmer of hope left.....

[LeftRight]

I'm so tired of the rightwingnuts being able to frame the debate. It's class warfare to ask the rich to pay their fair share in taxes, but just "good for the country" to let them pay FAR less. It's sexist to ask Sarah Palin tough questions, but make sure that Obama is vetted, since we "don't know him"

The list is FAR too long for me to type them all out here.......

[zanzig]

And then there is Rowena McCain complaining about Obama's Robin Hood attitude; according to her, how can any rich person possibly vote for Obama. I have to say that while the rich mates within the Republican Party have claimed the high ground of patriotism for at least the past 2 decades, the real truth is that they were doing so to avoid anyone realising that actually they were the traitors, who would not pay taxes. American politics is so very Alice in Wonderland, without the humour.

[TracyBB]

Maybe Joe the Plumber is fixing all the leaks so that things are not trickling down as the Republicans have told us they would. At any rate, things don't seem to be working all that well, why would we want more of the same?