You've heard it all over the mainstream media and in the blogospohere: Barack Obama wants to impose ruinous new taxes on poor Joe the plumber, taxes so onerous that they would make it very difficult for the guy to make ends meet.
But how close to the truth are these claims? Let's examine the facts for a minute, as realayed by this BBC news article:
Joe Wurzelbacher is an Ohio man thinking of buying a plumbing business who has briefly come to prominence in the US presidential debate.
Last week, when Democratic candidate Barack Obama came to his hometown of Holland, Ohio, Mr Wurzelbacher told the presidential hopeful that the Democrat's tax plans would prevent him from buying the business where he has worked for years.
Mr Wurzelbacher said the company earned $250,000-$280,000 (£144,800-£162,250) a year, and he challenged Mr Obama: "Your new tax plan is going to tax me more, isn't it?"
Mr Obama said that under his proposals, taxes on any revenue below $250,000 would remain the same, but that earnings above that level would be subject to a 39% tax, instead of the current 36% rate.
So, according to the facts as spelled out above, were Joe the plumber to buy the business in question (keep in mind that he doesn't even own this business yet, so at this point the argument is purely speculative) he would fall into that roughly 2% of small businesses that would pay additional taxes under the Obama plan. OK, but how much more would Joe end up paying? Well, do the math:
1) All income below $250,000 remains taxed at the current rate.
2) according to Joe's own estimates, that leaves between $0 to $30,000 that would be taxed under the new rate.
3) Let's assume a "worst" case scenario and use $30,000 as our baseline.
4) Obama's plan represents an increase of 3% over the current tax rate (39% vs. 36%)
So under the Obama plan, Joe, whose business brings in $280,000 profit every year, would pay an additional, back breaking $900
And that's going to keep him from buying the business? Not exactly Joe the pauper, is it? Something just doesn't add up.