Chris: Well, I think it's about time that people heard from the real Joe the Plumber. I'm not Joe, my name is not Joe, and I'm not a plumber. But I do own a small business with an adjusted gross income of over $250,000 a year. We are in the service industry.
And I have two choices here:
I can stick with the Republican tax breaks that I've received over the years.
Or, I could choose perhaps even to have my taxes increased a little bit more, and go with Obama's plan, have my taxes increase a little more.
And my choice is very simple, and I actually go with Obama.
The reason is simple: I right now need my customers to have more money to spend.
I may get taxed a little bit more. But the reality is that business is down, and more money in the pockets of the people who use my services is going to have a far greater impact on my bottom line.
Tom Ashbrook (Host): What about the McCain argument that if we take money out of your pocket, you're not going to employ as many people as a small business owner, Chris?
Chris: Yeah, I find that argument completely bogus. I've never believed in trickle-down economics at all. I think in reality it actually trickles up. I think [with] a lot of people in my situation, that money is not trickled down to their employees. What happens is it's spent on a new edition on the house, or a car or a boat or what have you. I think it's human nature. I think this country, we need our government because it protects us, and often forces us to do the right thing.
Tom Ashbrook (Host): Have you calculated what the Obama tax policy might cost you personally and you're okay with it?
Chris: I haven't exactly because as I think one of your spokespersons said before, it's very hard to say exactly what it will be. I can tell you this in very simple terms: I was far better off eight years ago than I am today. Business has been settling down over the last four years. And you know, in matters such as these, it's always a bit of a hunch because you never know what will be voted into law. But I'm very sincere about this, and I feel very strongly that my better choice, I will be financially better off under Obama in the end.
Tom Ashbrook (Host): Put money in the pockets of your potential customers. Chris, thank you very much. Let's get another small business owner: Mark in Ingham. Mark, you're on the air.
Mark: Hi, Tom, thank you for taking my call. Actually, there's a third option that Chris could take. (I'm also a small business owner, as you said.)
And what that is, is that realistically, if my net income or retained earnings are approaching 250,000, what I'm going to do, and what I think most small business owners will find is the best tact to take, is to take the difference and instead of just paying taxes on it, put it back into the business, where it becomes an expense -- you know, either a capital expense, enough of a capital expense that you can advertise [sic] it. Put it back into the business which is actually going to stimulate job growth in small business. You know, I'm going to buy equipment, I'm going to hire a salesman...
I actually think the consequence of Obama's plan, it's actually going to grow businesses and create jobs, rather than stunt business growth. And I haven't heard this discussed by anybody.
Tom Ashbrook (Host): But Mark, you're figuring, as I hear you, you could do that either under Obama or McCain?
Mark: Well, no. Specifically, under Obama's plan, what I'm saying is that the consequence of increasing taxes for net earnings or retained earnings of $250,000 or more, you know, once it gets to that, people are going to say, "Well, what am I going to do with this money? Just pay taxes on it?" No. You're going to do something with it that's going to keep your taxes down, and in the case of the Obama plan, keeping your taxes down is going to lead to growing your business, 'cause you're going to put it back into the business, so it doesn't count as retained earnings.
Tom Ashbrook (Host): Mark, we hear your strategy coming through there. Bill, let me put it to you: is Mark reading the Obama plan correctly? Will he have that option, and might that indeed pump business investment and ultimately employment?
William Gale (vice president and director of economic studies at the Brookings Institution and co-director of the Urban-Brookings Tax Policy Center): Yeah, I think that both of the last two callers point to the notion that a small increase in tax rates back to levels that existed during one of the most prosperous decades, if not the most we've ever had, is not the death knell of the entrepreneurial sector. And I think that's accurate.
