WingRight

There’s a lot of good commentary about the conversation between Joe the Plumber and the Obama. My favorite so far is from Claudia Rosett.

But I haven’t heard anyone talk about Joe the investor. As a predicate for his question, Joe said he was thinking about buying a business that would generate $250,000-$280,000 per year and wanted to know why Barack would increase his taxes. Joe has worked his tail off for 15 years and has put together enough money, perhaps with the help of his local banker (who I hope still has money to lend), to buy a plumbing business. Being a careful investor, Joe wants to know what the tax landscape is going to look like if he buys this business.

There has been some discussion about whether any part of the current market crash is based upon the anticipation of investors that they’re going to get taxed more under an Obama administration. If they believe they will, they will want to adjust their investments to minimize or eliminate the increased tax.

I think that Joe is an excellent example of a main street investor who is in the process of doing exactly that. He doesn’t want to sink a lot of money into a business if the profits he earns through his hard word are headed to Washington. It appears that Joe has determined that, given the current tax structure, it makes sense for him to buy the plumbing business, but he doesn’t want to get locked into that decision if Obama and a Democrat congress are going to raise his taxes.

I suggest that all over the country, Joes and Janes are doing exactly the same thing and that we’re seeing a small preview of the consequences of an Obama administration right now.

What a shame that is. I don’t know if Joe’s a good plumber or would be a good manager, but he seems like a smart guy, the kind of guy who is likely to make a success of a plumbing business.

What does the country lose if Joe doesn’t follow his dream? Everyone has focused on Joe’s future income, but that’s only a small part of what is lost. Joe’s plumbing business is going to hire and train more plumbers. These are good-paying jobs. In a small business, each of his employees is going to know that Joe started out just like they did, but through hard work and saving his money, he bought the business and is doing well. Joe’s employees are going to think about doing the same thing themselves. Some will be happy to continue to work for Joe, but some are going to try to do just what they’ve seen Joe do and start or buy their own businesses. These little Joes are going to hire more plumbers, etc., etc.

So, which is better for the American economy and the American taxpayer? Joe buying the business or Joe not buying the business? Over the course of a 20-year run, Joe’s plumbing business is going to contribute millions of dollars to the economy and pay millions in taxes at non-Obama tax rates. If Joe doesn’t buy the business, he probably won’t pay any of Obama’s higher taxes and both the economy and government tax revenues will suffer.

Tags: Economy, Liberal "Solutions", Obama, Taxes //