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I note with interest your back-of-envelope calculations. Taken together, the careful reader gets a rough sketch of the US structural economy and its integrity or lack thereof. The main point of your article is a subtle reminder, how income denotes identity and motives -- Joe*'s political economy. And how Americans' aspirations to "professionalism" are expressed by the so-called discourse. This is a profound passage.

Joe Six Pack or Joe the Plumber is all over the map politically; he has, at times, been the core supporter of the "New Deal," an avid participant in the Great Society as well as a reactive member of the "Silent Majority" and the "Reagan Revolution."

Here's the sketch. Let's assume amounts of gross income are average, (*) 35 hr/wk, 49 wk year

Joe Plumber -- $62K. (Incidentally, that figure reinforces 2007 census.gov reported HH --1 or more-- median income.)
(a) wage or salaried employee  (ex. CA union scale, $36/hr*)

Joe Plumber -- $274K
(b) sole proprietor  (ex. WA prevailing wage $160/hr), no "fleet"

Joe Plumber -- $166K (per your estimate of gross revenue, ≤ $250K)
(c) incorporated - estimated salary: $96/hr*, implies ≥ 1 employee "fleet," union scale min + mark-up. Amazing!

Looks like entrepreneurship isn't quite a losing proposition for easy-going Joe, afterall, as compared to reliable wage labor. Just so the All-American ambivalence, hostility even, toward unions' real efficacy through collective bargaining  can crystallize in the form of Joe "Plumber," American joke.

The uncanny element of this MSM episode is the magic number $250K income. There's a tax story underlying differentials in earning potential which Joe (b) and Joe (c) represent. That is how best to escape the "doughnut hole" of the Neo-New Dealer agenda ( $102K > i < $250K) and simultaneously the Alternative Mininum Tax (AMT). Estudio:

summary of EESA (effective tax emendments in the Bailout Bill) | randomly selected CPA

EESA provides a one-year "patch" that increases the AMT exemption. For married couples filing jointly, the 2008 exemption is $69,950. For singles and heads of households, it's $46,200, and for married filing separately, it's $34,975. These amounts are up slightly from 2007, but significantly higher than what they would have been for 2008 without the patch -- $45,000, $33,750 and $22,500, respectively.

The patch also expands the AMT income ranges over which the exemptions phase out and only partial exemptions are available. The 2008 phaseout ranges are now $150,000 to $429,800 for married filing jointly, $112,500 to $297,300 for singles and heads of households, and $75,000 to $214,900 for married filing separately. The exemption is completely phased out if AMT income exceeds the top of the applicable range.

cf. Dem whip | IRS processing S, C, 1040 | Universe of refundable and non-refundable "tax credits"

Americans are feral. Neither candidates nor MSM "economists" are going to air their opinions of the real impact of tax cuts on federal deficit spending that will drives federal and state budget defaults on basic social services. Better to indulge Joe Everyman's conceits -- nationalism and tax burden which demands relief. Sadly, "professional" salaried employees like Joe (a) and unlike licensed employees like Joe Atty or Dr Joe HMO, are exempt from scrutiny. Messrs McCain and Obama lump them in a "middle-class" audience which excludes Joe Plumber. The grift is a kind of shadow-boxing the enemy of federal income tax obligation and democratic unity formerly-known-as "solidarity" .

Diversity is the key to economic and political evolution.

by Cat on Fri Oct 17th, 2008 at 01:50:43 PM EST

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