Washington Post’s Joe the Plumber “Fact Check”

Washington Post fact-checker Michael Dobbs weighs in (10/16/08) on last night’s debate–the headline more or less gives it away (“Both Campaigns Distorting Facts on Money Matters”). His first fact-check, though, hardly clears the air.

Some of the sharpest back-and-forth over economic issues concerned the taxes that an Ohio plumber named Joe Wurzelbacher stands to pay under a possible Obama administration. McCain was correct in stating that Joe the Plumber will end up paying a higher marginal tax rate under the Obama plan if his small business makes more than $250,000 a year. But McCain was wrong to say that Obama is planning to fine Joe the Plumber and other small-business owners if they fail to provide health insurance for their employees.

Thatâ┚¬Ã¢”ž¢s a rather charitable description of what McCain actually said at the debate:

You were going to put him in a higher tax bracket which was going to increase his taxes, which was going to cause him not to be able to employ people, which Joe was trying to realize the American dream.

McCain’s explanation is a little garbled, but he would seem to be referring to the impact of Obama’s tax increase on high earners. So the question is whether that marginal tax increase would cause Joe to cut back on hiring; it seems unlikely– as Dean Baker pointed out:

While this income would put Mr. Wurzelbacher above the threshold where he could expect to pay higher taxes under Senator Obama’s tax plan, the increase in his tax bill would be relatively modest. Under Senator Obama’s plan, the tax on income above $250,000 would increase by 3 percentage points from 33 percent to 36 percent. This means that Mr. Wurzelbacher could expect to see his tax bill rise by between $0-$900, assuming that this plumbing business would be his entire taxable income. If he has additional taxable income, then he would see a larger increase in his taxes.

Dean added that reporters should “explain the extent to which Joe the Plumber would see his taxes increase under Senator Obama’s tax proposal. The Washington Post did nearly the opposite, calling McCain’s comments “correct.”

One footnote: Dobbs’ phrasing of the hypothetical–“if his small business makes more than $250,000 a year”–is quite misleading. The question is not what happens if Wurzelbacher‘s small business makes $250,000 a year–it’s what happens if it produces more than $250,000 in taxable income for him. Many small businesses take in more than a quarter-million in a year; far fewer produce that much in profits for their owner.

About Peter Hart

Activism Director and and Co-producer of CounterSpinPeter Hart is the activism director at FAIR. He writes for FAIR's magazine Extra! and is also a co-host and producer of FAIR's syndicated radio show CounterSpin. He is the author of The Oh Really? Factor: Unspinning Fox News Channel's Bill O'Reilly (Seven Stories Press, 2003). Hart has been interviewed by a number of media outlets, including NBC Nightly News, Fox News Channel's O'Reilly Factor, the Los Angeles Times, Newsday and the Associated Press. He has also appeared on Showtime and in the movie Outfoxed. Follow Peter on Twitter at @peterfhart.