Joe the Plumber Meets Sam the Gas Station Guy
A few days ago (which is to say, prior to the Wednesday night presidential debate), I met Sam. Joe the Plumber should really meet Sam, too.
I was jogging away on the treadmill at my local gym when the guy next to me--who turned out to be Sam--introduced himself. He seemed to want to talk, which was fine by me. He asked what I did. I told him. He immediately replied, "Oh, I've never met a professor before. I never went to college. Seriously, in my entire life I've never read a book all the way through. Please, Professor, don't make fun of me."
Of course I wouldn't. Besides, I found Sam's humility, curiosity, and affability endearing. As Sam talked, I became only more enthralled in what he had to say. He told me his life story. He grew up in Yonkers, New York and came out to California in his early twenties. At 22 he found himself working as an entry-level cashier at a gas station. Eventually he cobbled together loans and a payment schedule and bought the station.
Cut to the future: Now 38 years old, Sam owns more than 100 gas stations in southern California and 25 restaurant franchises. He has over 800 employees working for him. He has four kids in a happy marriage. He's a devout churchgoer. He's a proud American and lets you know that.
We started talking politics. "You know what," he said, "I'd really like some reporter to come and ask me my views on the election. Why don't they ever seek out guys like me? I got something to tell them. Professor, why isn't the LA Times or somebody asking me for my opinion?"
I probed a bit. "So what is it you want to say to them?"
Sam opened the verbal floodgates. "Hey, I've always voted Republican. For the first time in my life I'm going to vote for a Democrat. I'm voting for Obama."
"Why's that?"
"My gas station businesses are hurting. I make the same profit margin--5 to 8 cents per gallon--no matter whether the price of gas is $1.99 per gallon or $4.99. The big oil companies are the ones raking in the profits when prices go up, not me. I can make money on gas only through volume sales--and if people are hurting, I make less on gas. Or I start to lose money, like now. Where I make money, though, is when they come inside and buy discretionary items--food, drinks, lottery tickets. Right now, people aren't buying. I know 20 of my gas station colleagues are about to declare bankruptcy. It's bad."
"So I'm fed up with the Republicans. Tax cuts for the rich, the war--all that stuff. The middle class needs help. I'm finally convinced. I'm going for Obama. First time in my life, I tell you."
I asked him about paying higher taxes.
"I don't care about that. If I'm making money, I don't care. I'll pay my taxes. But I'm not going to make any money if the middle-class guy doesn't have money in his pocket to buy my gas or my food. I don't need the big tax cut right now. That's not going to bring the customers into my gas stations."
Joe versus Sam. You could line up economists spouting elegant theories for each side, but the basic arguments can probably be reduced to Joe's and Sam's respective positions on very gut levels. Joe's never made $250,000, but he feels that if he ever reaches that threshold, he shouldn't be "penalized" for his success. He seems to believe that cutting taxes for wealthy individuals somehow serves his current financial interests and his aspirations for the future. Sam's already lived those trickle-down and dream-up Republican talking points but now rejects them with hard-won conviction.
Were the two of them to meet and strike up a conversation, side by side on adjacent treadmills, I dare say that Sam would be giving Joe an earful, not the other way around.
Public Service Plug: It may be getting a little close to the wire in some places, but if you want information about requesting an absentee ballot in your area, check out the resources at Long Distance Voter.
Entertainment Plug: Yours truly appears as a talking head commentator in the documentary This American Gothic by filmmaker Sasha Waters Freyer. It will be screened at Echo Park Film Center tomorrow night (Oct. 17) in Los Angeles, at the We, The People Film Festival, starting at 7pm. If you're in the area, I hope to see you there!
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Lemme get this straight..
I do understand his frustration with who is making the real money (Exxon, Mobil ect) but here is the reality, you can cut the subsidy but I dont think they are going to roll over that easy, I can hear them in the boardroom now: "So they cut the Subsidies huh? Ok lets jack up the price to make up for it" The idea that Obama is going to wave a magic wand and everything will be great is laughable, and I hope everyone is prepared for the reality.
Nope, you completely misunderstand Obama's proposal.
There isn't enough oil on US soil to make much of a difference, and the goal isn't to end oil usage, it's to be able to stop buying it from the middle east and venezuela in ten years.
at least he's willing to acknowledge that a problem exists.
Once we all convert our autos to CNG, T. Boone Pickens will b glad to provide him with the CNG for his pumps. Considering it is 40% less than gasoline, his customers will have money to spend on that bag of pork rinds and a Big Gulp. Maybe, Sarah Palin will get that natural gas pipeline off the ground in the next ten years and the lower 48 will get some real help.
We use 25% of the WORLD OIL. The United States only has about 2 to 3% of all oil in the world within our borders. So, it is a losing proposition. We cannot drill our way out of this.
I haven't heard anything about a magic wand, but it's clear the past 8 years haven't been working. We need to stop the war and invest in infrastructure.
The bubble on Republican economic theory has finally burst. When the retail numbers hit the Dow yesterday, and it tanked... Milton Friedman was finally laid to rest.
http://en.
What I want to know is, when did it become "unpatriotic" for me to pay my taxes?
What really helps small businesses are customers with money to spend. Over the past eight years, real income after inflation is down sharply for the middle class.
It doesn't matter if you decrease income tax to zero on small businesses, if their customers have no money to spend, they are going to lay people off, not hire them.
I think there's only one thing people need to know about Joe the Plumber.
He's better off under Obama's proposed tax plan (and he's finally admitted that). Along with 95% of families and 98% of small business owners.
Sure he is better off... Provided he (or others like him) DONT make 250K or more.
If you own a small business and are anywhere close to making 250K what are you going to do? Id cut down the amount of work I take on to insure I dont hit the next tax bracket!
POP QUIZ!!! "If 249K means 25% to the IRS and 251K means 35% to the IRS... What do you do???? Note if you get this question wrong it will cost you $25,000 a year, and that 25,000 could be one more employee or a raise for those employees you already have.
Food for thought: "The grass is always greener over the septic tank."
Yeah, he doesn't make that much, so he shouldn't even be PART of a discussion about people making that much. You want a human example, find one, don't make one up.
Second, you completely misunderstand how the tax rates work. The higher interest rate only applies on money OVER 250k, that first 250k is taxed at the lower rate.
So in your example, the difference between 250k and 251k is currently $350 in taxes (35% on the $1000 over 250). With an increase to 39%, that extra thousand dollars would mean $390 in taxes. That's a $40 tax increase for someone making 251k, less than .02% of the total income.
The notion that hitting a number increases the rate on all income is completely wrong, that $25,000 increase is just a complete misunderstanding of how tax rates work.
And also don't forget, the 250k number is PROFITS of the small business, not total income. If a small business owner really wants to stay under 250k, they can always increase spending on things that are deductible to do it.
Bad logic.
The tax is on the individual income NOT the business profit.
In you example, if that owner, employed the extra employee, the $251K would be reduced to $226K which would be taxed at 25% BUT the business would get the Job Creation Credit.
So even using your figures and your bad understanding, it still is better than no business and no new jobs.
Never use your calculator when you're angry. The higher tax rate would only apply to the $1,000 in excess of $250,000. So, using your example, the difference would be $100.
Your concept of the whole tax structure is wrong. Please go back and look at what a tax preparer would say not, Rush Limbaugh.
I am no financial wizard but I do know that if you make or gross, $250,000.0
Funny thing about those higher taxes.
I have a couple of friends in the entertainment industry and they are pretty close to being outright millionaires and on one of my recent visits to their workplace, we got talking about taxes and both of them agreed they would have no problem with higher taxes.
They say they get by just fine and an extra amount wouldn't bother them at all. As one of them put it, they look around and see things are well protected, police, fire, pretty danged good roads, good public schools (despite the overall ratings, their kids are doing well, some areas are better than others) and out society, even in these troubled times seems to function without resorting to bombings, assassinations, religious nutjobs fractionalizing the country, and they feel that doing more to help would be good for them.
THEY believe paying taxes is patriotic.
Seems only republicans believe paying taxes is treasonous.
It IS patriotic to give back to the country that gave you so much. None of us gets our money alone. It takes the entire society, the entire infrastructure, educational system, health care system, everything to create a situation where we can use our talents to make money. We should be happy to pay back to our country a small fraction of what we make. After a point $$ is only numbers on a spreadsheet.
The guy is a freaking mega-mega millionaire and wants the government to bail him out just like the bankers.
Who is?
It's important to be aware of another issue on the price of gas. We rant and rave about the oil companies making all the money while the middle class suffers. What is not generally known or is frequently forgotten, is that the state and federal government make about 38 percent combined on every gallon of gas we buy. Think about it: you pay $4.00 for a gallon of gas, and your tax is $1.52. If you're putting 15 gallons in your tank, that's a total of $22.80. So, our state and federal governments don't give a toot if the middle class is paying big bucks for gasoline, because they're raking in the revenue.
Give the middle class a break, you guys! We're trying hard to carry this country on our backs, so we deserve some cuts SOMEWHERE!
Obama/Biden '08
I'm not sure but where we are it's a flat amount of money and the taxes haven't been raised a bit on the price of gasoline. The state gets the same amount whether it's five bucks a gallon or two bucks a gallon.
I'll double check but I really do seem to recall the number being stagnant.
I believe she might be referring to the Federal Gasoline Tax that hasn't changed in quite a while last I checked. It is a primary funder for the Federal-Aid Highway Program so while it hurts a bit at the pump, just be glad it hasn't gone up such a long time. However it might need to go up a little to boost funding for our nation's highways and all as well as stimulate road projects to create more jobs.
The federal tax currently stands at 18.4 cents a gallon while the average state tax is about 28.6 cents (according to GasPriceWa
BTW, it's my first post here and it feels pretty good since I have been reading a lot on here lately after converting over from only Drudge. Glad to see some balance and know that the sky isn't falling and that everyone is fighting the good fight.
Obama/Biden '08
I'm not sure about that. Can you site a source for your stats. I'd love to get some facts.
This is a great story - I happen to be one of the lucky ones that will see a tax hike under President Obama's tax policy. And guess what - with a 10 trillion dollar deficit, an economic meltdown, and two wars, I happen to think it IS patriotic to pay taxes. I am too old for national service, but I can still sign my name on a check to uncle sam to ease the burden for someone who has been less fortunate than me. I can also open my house to an Obama staffer in this battleground state, and my wallet to this campaign to save our country - and most importantly I CAN VOTE.
As Warren Buffett has said, and as Sam and I have learned - to those of us to whom much has been given there is a responsibility to pay back into the system - we do not need Bush's tax cuts if it means the country slowly dies. Giving us tax cuts does not drive more economic activity, there is only so much we can spend. But give a few more dollars to someone who needs it, and those dollars will be put to work immediately. Ten dollars into the system at the bottom delivers 10 times that much in economic activity. This is trickle up economics, and it is what finally saved this country from the great depression. It will save us again.
Amen!! Let's hear it for trickle-UP economics. We need to remember that three of the thirteen original states described their form of government as a "COMMONwealth". A society built on "me first" greed can't survive.
I'm not wealthy enough so that my tax rate would increase under Obama's plan, but I'm in pretty comfortable circumstances, so I wouldn't complain if it did. If my paying a little bit more in taxes means that some poor kids can get health care or a decent education, that sounds like a good investment to me.
Your damn right! Now if we can only get this into the head of Joe the non-plumber. For Gods sake, why can't people see that?
Thank you. In my Freshman Economics class in 1980 - my Professor laid out the same logical and provable argument. It changed me from a Republican to a Democrat forever more.
It also goes to spending, if you spend $10 on a bomb and it sits in a hanger - maybe $5 went to the builder but $5 is locked away in that bomb. Where $10 refunded to a low income tax payer will probably put $9.50 back into the economy. That 9.50 will keep flowing around from to buisness owners to employees back to the buisness owners.
That is why as you said trickle-up economics brought us out of the depression - money moved.
Thank you for your eloquently stating the obvious. Reaganomics only "worked" when a thriving middle class existed. Now that the majority of the country struggles with just getting by, the fallacy of the trickle-down theory is exposed. The second American Gilded Age is destroying this country faster than anything before in our history. Sam doesn't need a degree in economics/history to understand that, just something that's even more rare in our society - common sense.
You just made my day! Thank you for your honesty and generous spirit. I do not know if you are a Christian or not, but you certainly embrace the true Christian spirit of reaching out to take care of one's fellow man when he is hurting.
You also show great wisdom by admitting that you know you cannot make any money when the rest of us have none to give.
This guy gets the importance of the middle-class and what bottom-up economics means. The only industry not directly reliant on the middle-class is luxury, but even they rely on customers who have middle-class customers. The poor have no money to spend and the rich are so few that they are a tiny customer base. The middle-class is the only group that is a wide customer base with change in their pockets. They drive the whole economy. Look at the majority of super-rich guys and what they do. They make products for the middle-class.
I always seen that the majority of Republican candidate's platforms were aimed at maintaining an aristocracy while pandering for votes from the military and the ignorant. This is why some of their policy proposals are conflicting, such as cutting taxes but increasing the size of the military. How are you going to pay for that military with less tax revenues? They incorporate social conservatives into their platform to get the vote of the undereducated religious nuts and racists. How else would you get the votes of people who are in lower income brackets when your economic policies are structured to benefit the upper class?
Hey JOE, where ya going with wrench in ya hand......
Every time I hear "Hey Joe.." I think of that song.
Joe is officially in the tank for the GOP. He'll be on Fox this weekend.
It shouldn't take a college degree to figure out that if people can't make a decent wage they can't spend. I have owned a business for 25 years. I have always done better when people are working.
This is why I never understood why any business owner would be against a living wage. Just doesn't make sense. We owe it to ourselves to take care of our employees, suppliers and customers. If we are not all "sharing the wealth", "we're sharing the poverty."
Exactly! We need jobs with a fair wage. Right now I'm working, but I've been told I'll probably be let go by December. My sister lost her job recently when the small company she was working for could not make payroll. I know so many people who are out of work.
Because people are out of work, the small businesses are beginning to suffer. I have a dog that needs grooming every few months, last week I took my dog to the groomer, a wonderful man who runs a small family business. Literally, his whole family works there. He told me his business is down 40% in the last 2 months. He has always been upbeat, but last week, he looked so sad, he worried about supporting his family.
I see so many small businesses going under now. It's terrible.
And yet people still will vote for McCain. It is like they are oblivious to what goes around
them. Go figure!
I've only owned a business for 5 years and we are seeing the same thing. And we own a medical clinic which is pretty recession proof to an extent. We have combatted the ongoing squeeze by lowering our overhead [moved into a smaller place] and by lowing our charges to patients so they can get appropriate care at a cost they can afford.
Sure we take home less, but ... it's the right thing to do. FYI, I giving our assistants a raise next month. I can't afford a big one but they are hurting and they are good at what they do. They have earned it.
I love what you said. We can share the wealth or we can share the poverty.
Wow. This post should be sent to every economist in America.
You can bet "Joe the Plumber" will be on every network and every Limbaugh-low radio talk show from now to Nov. 4.
Wish we Dems could persuade someone like your Sam to share his process of recognition so widely. Republicans have been successful in persuading so many that business success comes to those who stick to running the arrested development hurdles: MY business dreams, MY business moxie, MY business ability. What Sam has recognized-- and it's an epiphany that's made taxation seem to him a reasonable cost of doing business-- is that if his CUSTOMERS lose THEIR dreams, their moxie, or their ability to BE his customers, he's got no business. We're in this together, people!
Sam understands what Henry Ford understood and what the misguided Apostles of Reaganomic’s have never comprehended: when people earn a decent wage, they spend money. Demand Side Economics.
We now see the results of 28 years of Supply Side.
Supply? We don't even make anything in the U.S. anymore. That has got to change!
There are millions of small businesses in the US that make everything you can think of, but the msm only talks about the huge corporations and how they're faring.
Apparently Joe not only doesn't make anywhere close to $250k, but he also doesn't pay his taxes. Way to be an American Joe!!
All Hail to Sam! It saddest part about gas prices hikes is that the stations themselves get hit the hardest, not only by angry customers, but by the oil companies that quite frankly don't give a s**t about anyone but themselves. Sorry Sam!
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