Joe the Plumber, a new spin

iVillage Member
Registered: 10-16-2008
Joe the Plumber, a new spin
166
Fri, 10-17-2008 - 4:16pm

The appeal of Joe the Plumber is that he puts a face to a tax number. Even if he's really not earning that much or isn't even a plumber. I am married to someone who makes that much and let me try to make the same point from a different perspective.

Go ahead, raise my taxes Obama. You are right, I can afford it. But first I'd like you to meet Mike, Steve and Emily. I don't own a business or anything, but I do spend my money (you know, since I'm one of the have's, that's what we do). Obama wanta to spread my wealth around and here's how it will affect 3 people in the middle and lower income brackets.

Mike - Mike is a music school teacher. He does private lessons on the side to make a little extra, in addition to volunteering in a community band. He loves teaching and playing music. He teaches one of our children and we pay him $100/mo.

Steve - Steve works full time doing private music lessons. He has two kids who he pays child support for and he lives on the edge of poverty. Private lessons is his only source of income. We pay for him to instruct three of our children and me every week. We pay him $364/mo.

Emily - Emily works full time but became a mom at age 18 yo, has no education past high school and lives near the poverty level. She is on her own being recently divorced. She helps us out once or twice a week, earning $120-$160/mo.

I recalculated Obama's tax proposals and realized it will only cost my family $1,350/mo on average. I can cover almost half of that by cutting my budget back, not hiring the babysitter and doing away with private music lessons (they are luxury items anyway).

I'm sure Mike, Steve and Emily will be glad to know that instead of earning money from my family, they will get $500 refundable tax credit next year under Obama's plan. And maybe even if $300 stimulus check like they got from Bush in the past.

Make less and pay less in tax, that's Obama's plan for the middle class.

Pennsylvania Mom http://openlettertobarack.blogspot.com/

Pages

iVillage Member
Registered: 01-12-2008
Fri, 10-17-2008 - 11:07pm

Wow. Nice analysis and argument!



Photobucket


siggy aug 09
iVillage Member
Registered: 10-16-2008
Fri, 10-17-2008 - 11:31pm

I may not be following what you are saying.

Emily already gets an EIC. She makes little enough she should be in the bottom 1/3 that pays no federal income tax. She pays the payroll tax and Obama would also give her $500 back which is a partial refund of the payroll tax. With healthcare she isn't getting free healthcare from either candidate. With Obama she'll be legally obligated to find insurance, we don't know what the National program will cost her but we do know McCain will giver her a credit to help pay for the cost, and give her more plans to choose from. Where did you get the tax numbers from? Both candidates would increase the number of people who pay no income tax, she should only be paying the payroll tax, with a $500 "make work pay" credit from Obama or a $5,000 healthcare credit from McCain.

Neither Mike or Steve are starting a new business. They would get the "make work pay" credit, that's only $500. I don't see how the after school program or the dependent care credit would help either of them, Mike doesn't have kids and Steve's ex is the one who would get the benefit of the credit. Emily uses family and friends, she doesn't have daycare expenses she could get a credit back for.

Pennsylvania Mom http://openlettertobarack.blogspot.com/
iVillage Member
Registered: 10-16-2008
Fri, 10-17-2008 - 11:36pm
Because to save the same amount for college we'd have to start taking from our monthly income instead of just saving the bonuses. Otherwise we'd be reducing our college savings, instead of cutting out extras. But someone just pointed out Obama has a $4,000 universal college credit for every college student if they do community service, over the years that could add up to $96k in savings for us - woohoo Obama's going to help fund our kids education now, and we don't even deserve it. How insane is that!
Pennsylvania Mom http://openlettertobarack.blogspot.com/
iVillage Member
Registered: 10-16-2008
Fri, 10-17-2008 - 11:42pm

>>>also, i think steve mike and emily would fair better with obama, not just because of this tax policy, but because of his overall economic policy. <<<<

Can you explain to me how? I just watched an Obama commercial where he said he doesn't care about CEO's, he cares about the little guy who just lost his job because his company went overseas. How does Obama's plan encourage companies to stay more than McCain who will cut business tax? Plus if the Company goes overseas then CEO is out of work too, in this economy he might have a hard time finding a job, he might find himself right into the middle class suddenly getting a tax cut. Um, now he'll care about "lifting up" the CEO? Seems like a tall order for the government to be living nearly everyone up.

>>>there are many other mccain supporters on this board who would hear the stories of steve mike and emily say: "too bad. they need to pull themselves up by their bootstraps. personal accountability."<<<<

I think Mike, Steve and Emily ARE pulling themselves up by their bootstraps! I'm not giving them a handout, they are working for pay. That's a good thing. And I think they would be happier with the chance to work and earn than to work less and earn less in order to get a $500 tax break.

Pennsylvania Mom http://openlettertobarack.blogspot.com/
iVillage Member
Registered: 08-31-2008
Fri, 10-17-2008 - 11:44pm

<How is giving tax credits going to make people suddenly earn a better living wage?>


Do you have a real response to the fact that income inequality and the disappearing middle class may be contributing to our current problem? For Reagan to Bush, the rich are richer and the middle class has less buying power to drive the economy. Trickle down does not work; have 30 years of proven history.


http://www.demos.org/inequality/numbers.cfm


Wages

Between 1949 and 1979, the inflation-adjusted average hourly wage for production workers rose 75 percent, from $9.00 to $15.78. Since 1979, the average production-worker wage has risen only 2 percent, from $15.78 to $16.11. (EPI, State of Working America 2006-07, Table 3.3)


Between 1979 and 2004, American workers raised their productivity 64 percent, while their median hourly compensation rose only 12 percent. (Economic Policy Institute, Datazone: PDF, XLS)


In 2006, households in the bottom 20 percent received $23 due to the Bush tax cuts. Households in the middle 20 percent received $448. Families in the top 1 percent received $39,020. And households in the top 0.1 percent received $200,523. (Urban-Brookings Tax Policy Center


iVillage Member
Registered: 10-16-2008
Fri, 10-17-2008 - 11:46pm

I can't really explain why some industries pay less than others. Maybe it's too late for my brain to think about that.

I will say that my husband's income is allowing me to get more education so I can change careers and so something to help people instead. I'll earn a lot less in my new profession but it will be worth it to do something I think is more valuable to society. When I'm done he hopes to quit his job and start a business in a way that will give back to the community. That's if we can save enough for college and retirement, and the economy bounces back first.

Pennsylvania Mom http://openlettertobarack.blogspot.com/
iVillage Member
Registered: 10-16-2008
Fri, 10-17-2008 - 11:56pm

Ashley, I really enjoyed reading that post and I think I understood most of it :) I have some questions though - isn't there a psychological effect with raising of taxes? So let's say the optimal taxes are a bit higher for the upper middle class than they are right now, raising them won't be punitive but if I have sudden increase in taxes I'm going to feel the bite and cut my spending. Therefore wouldn't a gradual increase in taxes be better?

What do you think about people who say now isn't the right time to increase taxes? We are really feeling the pinch with the losses in the market, 30% of our kids college savings is gone, we didn't have much invested in mutual funds but they were doing bad before the market tanked because we bought at a high point, my husband has stock options that are all but worthless right now. Not to mention we are worried about my husband's job being at risk for layoffs if the economy doesn't improve. Just the idea of our taxes going up is changing our spending habits.

FWIW I have no issue with the progressive tax rate. I agree there is an optimal balance, the upper middle can afford to pay more but if taxes are too high it's punitive.

What do you think about the subprime crisis and the impact it has on the economy? Do you fault Bush for that too (not being snotty, really curious what you think about it).

Pennsylvania Mom http://openlettertobarack.blogspot.com/
iVillage Member
Registered: 10-16-2008
Sat, 10-18-2008 - 12:01am

Can you explain to me how the middle class is disappearing when the upper class is less than 1% of our population? The upper middle is only 4.5%?

>>>Between 1979 and 2004, American workers raised their productivity 64 percent, while their median hourly compensation rose only 12 percent. (Economic Policy Institute, Datazone: PDF, XLS)<<<<

I'm not sure how increase in productivity is measured, or whether there SHOULD be a 1:1 relationship between a change in productivity and a change in median hourly compensation?????

>>>>In 2006, households in the bottom 20 percent received $23 due to the Bush tax cuts. Households in the middle 20 percent received $448. Families in the top 1 percent received $39,020. And households in the top 0.1 percent received $200,523. (Urban-Brookings Tax Policy Center<<<<

The bottom 33% pay no Federal income tax (once they file and get a refund of any taxes paid), so you wouldn't expect them to benefit much from a Federal income tax cut.

Pennsylvania Mom http://openlettertobarack.blogspot.com/
iVillage Member
Registered: 08-31-2008
Sat, 10-18-2008 - 12:15am

<Because to save the same amount for college we'd have to start taking from our monthly income instead of just saving the bonuses. Otherwise we'd be reducing our college savings, instead of cutting out extras.>


Irony meter,

iVillage Member
Registered: 09-15-2008
Sat, 10-18-2008 - 12:38am

<>


-much of how i feel about obama's plan has been explained in the previous post by ashley. i feel like his plan creates more of the balance our economy needs. he wants to give money to the middle class, that money will get spent and contribute to the stimulation of the economy. as for the ceo, i may be wrong about this and someone can probably answer rthis more accurately than i can, but from my understanding, the ceo would not be out of a job. i dont think the entire company ups and moves to a different country, but builds factories elsewhere. for example, Nike built factories in indonesia and mexico, but their headquaters is still in oregon. after reading mccain's website, i assume he would give tax cuts to corporations that build factories elsewhere for cheap labor. obama wants to end tax cuts for companys that send jobs overseas. as well as give tax credits to business that create jobs in the US. mccain wants to give tax cuts to corporations, but as ashleys post pointed out, there is no proof that that will do the economy any good. aslo, obama will not raise taxes on 98% of small business. and will eliminate their capital gains taxes. he also will invest in green job technology and research and development.


do i know that obama's plan will work?no.but i have more reason to believe that his will do more good than mccains


<>


i agree that they are pulling themselves up by their bootstraps. but should you have to let them go, other people will see: they should have persued different careers, they should not have had so many kids...

Pages