Why 'Joe the Plumber' Matters

Wurzelbacher fields questions from the press outside his Holland, Ohio, home (Madalyn Ruggiero / AP Photo)

As you've probably ascertained by now, the real star of last night's debate wasn't Barack Obama, or John McCain, or Bob Schieffer. And it certainly wasn't the financial crisis, or Mess 'o' Potamia, or Bill Ayers, or ACORN. Instead, it was some guy named Joe Wurzelbacher--a.k.a. "Joe the Plumber"--who confronted Obama on Sunday in Holland, Ohio, about his tax plan. At McCain's prodding, the candidates wound up mentioning Wurzelbacher 26 times at Hofstra. For comparison, the economy came up 16 times. The war in Iraq? Six.

Thanks to the MSM's raging "real person" fetish, Wurzelbacher's 15 minutes of fame have extended well into today. Intrepid journalistic investigators have discovered, for example, that Wurzelbacher, 34, voted in the Republican primary, doesn't have a plumbing license, still owes $1,200 in unpaid income taxes and is actually named Samuel. Financial crisis! What financial crisis? McCain, meanwhile, was happy to let Wurzelbacher dominate what would've otherwise been a bad news cycle for him. "The real winner last night was Joe the Plumber," he said this morning in Downingtown, Pa. "Joe's the man." This morning, Wurzelbacher coolly fielded questions from the frantic press swarm stationed outside his home. Cable reporters spent the afternoon milling around in his yard. To paraphrase Russell Hammond of Stillwater, "You, Joe, are what it's all about. You're real. Your room is real. Your friends are real. Real, man, real. You know? Real."

But while it's fun to while away a day obsessing over a random Ohioan, few commentators are actually focusing on why Joe the Plumber is worth obsessing over. It's not just that Team McCain is casting him as a symbol of its superior tax policies. It's that, upon closer inspection, Wurzelbacher could just as easily serve as a symbol of why some voters may prefer Obama on the tax issue. As such, Wurzelbacher is like this year's entire tax debate distilled into one perfect Rorschach test of a person. His Republican registration, nonexistent plumbing license and $1,200 in unpaid levies are totally irrelevant. But what he represents in terms of taxes is not.

Here's why. On Sunday, Wurzelbacher told Obama that, after 15 years of working as a plumber, he's now preparing to purchase a company that makes more than $250,000 a year. "Your new tax plan is going to tax me more, isn't it?" he asked. As anyone who's been following the election knows, Obama plans to cut taxes for everyone making under $200,000, to leave tax rates for those making between $200,000 and $250,000 alone and to raise taxes on those making more than $250,000 to pre-George W. Bush levels. In his answer, Obama assumed that Wurzelbacher was currently earning more than $250,000 and went on to explain his plan. But the thing is, Wurzelbacher admits he isn't actually making $250,000--and he won't be anytime soon. "Would you be in that [above-$250,000] category?" CBS's Katie Couric asked Wurzelbacher last night. "Not ... presently," he said.

So how much is Joe making? Right now, he's still a plumber, so he's probably raking in about $40,000 to $50,000, according to government estimates. When he buys that small business, he's likely to earn more--but not $250,000. That's because $250,000 is the amount of revenue the business is said to pull in; after expenses--equipment, employees, etc.--his personal income (salary plus profits) will be significantly less. Let's say a still-healthy $100,000.

How, you ask, would each of candidates change Wurzelbacher's tax bill if elected president? According a recent study by the nonpartisan Tax Policy Institute--which broke down Obama's and McCain's proposed tax plans by income bracket--Joe the Plumber (the guy making, say, $50,000 a year) would see his taxes slashed by $319 under McCain and $1,042 under Obama. That's a $723 difference. Meanwhile, Joe the Small-Business Owner (the guy making $100,000 a year) would pay $1,009 less under McCain and $1,290 less under Obama, for a difference of $181. 

This presents us with an interesting--and illustrative--case study. Whether or not Wurzelbacher buys his business, he's guaranteeed to get a larger tax cut from Obama than McCain--and yet he still prefers McCain's plan to Obama's. Ultimately, then, we end up with two potential voting blocs. First there are the people who earn less than $250,000 and want the largest possible tax cut for themselves--a group that doesn't include Joe the Plumber OR Joe the Small-Business Owner. Then there are the people--like Joe--who earn less than $250,000 a year, but are willing to turn down the bigger tax cut for one of three reasons. Some are trickle-down/free-market adherents who believe that larger tax cuts for those richer than themselves will best serve the economy. Others simply don't trust Obama to keep his word. And then there are those who identify with the wealthy, believe they're bound strike it rich someday and don't want to pay higher taxes when they do.

Both groups--Group Joe and Group Non-Joe--have valid positions. But the question facing McCain--who hopes to make taxes the centerpiece of his closing argument--is which group is bigger. All told, voters making less than $250,000 a year represent 98 percent of the electorate, so they'll be picking the next president. Traditionally, many of these folks resent the idea of having to pay more money if they ever become part of the other two percent, so they side with Republicans on taxes. After all, that's why George H.W. Bush closed the gap with Bill Clinton in the final days of the 1992 race. McCain may still benefit from a similar shift. But one has to wonder whether the traditional GOP message on taxes has lost some of its luster amid a financial crisis that suddenly makes it significantly easier for people like Joe the Plumber--if not Joe himself--to picture themselves earning much less in the future, not much more. In which case Obama--who offers more people more money more quickly--would stand to gain.

Developing, as they say ...

UPDATE, Oct. 17: The Wall Street Journal's Jonathan Weisman has more detail on the company Wurzelbacher hope to buy someday:

The company, A.W. Newell Inc., with two employees, Al Newell and Mr. Wurzelbacher, reported sales this year of $100,000. On sales of that volume, a firm that size could expect to earn about a 6% profit, or $6,000, after salaries and costs are taken out, according to Lee Smither, managing director of FMI Corp., a Raleigh, N.C., management-consulting firm for construction contractors. The average income of plumbers, pipefitters and steamfitters in 2006 was $48,002, according to the Bureau of Labor Statistics.

Earlier, I'd taken Wurzelbacher's claim that A.W. Newell, Inc. "makes" more than $250,000 a year to mean that sales exceed $250,000. Turns out Wurzelbacher's statement was misleading: $250,000 is the net worth of the company. Sales are only $100,000. Which means that Joe the Small-Business Owner won't rake in anywhere near $100,000; he'll simply net an additional $6,000 (i.e. the company's profits) on top of his old salary of about $40,000. Ultimately, then, Joe the Small-Business Owner would be in the same boat as Joe the Plumber: that is, getting a tax cut of $1,042 from Obama and $319 from McCain. For Wurzelbacher to take home the $200,000-$250,000 required to trigger Obama's proposed tax increases, according to the Journal, "a mom-and-pop plumbing company like Newell would have to clear $5 million in annual sales."
 

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