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twitterLetter to the editor:
Economy not the plumber’s strong suit
Friday, Oct. 31, 2008 | 2:03 a.m.
Joe the Plumber has a typical American dream that someday he will buy his employer’s business. Joe seems to have assumed or guessed that his employer makes more than $250,000 a year. Joe has acknowledged that he would pay less income tax under Barack Obama’s plan until he buys the business, but asserted that after the purchase his earnings over $250,000 would be in a higher tax bracket than under John McCain’s plan.
As a retired attorney and CPA, I believe Joe has not taken into account that he could use his current Obama tax savings toward a down payment, and if Joe could buy the business six months earlier, that would be worth almost $125,000 in extra income to him. Joe’s savings under McCain’s plan after his purchase would be only about $2,300 a year, assuming the business made $300,000 a year.
Joe also has not taken into account the deductibility of the interest he will pay on the purchase debt, or if structured differently, the income paid to his ex-employer from the business. With that taken into account, Joe’s net income will fall below the $250,000 level for many years, so Obama’s plan would help him, not hurt him, and McCain’s plan would not help him, until the purchase debt was fully paid off.
It is clear why Joe supports McCain. As with McCain, economics is not his strong suit. The more fascinating question is why McCain continues to make such a big deal out of Joe, when Joe’s economic analysis makes no sense at all.
Discussion: 32 comments so far…
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Joe wasn't talking about the economy. Joe was talking about the right to keep what you earn and not have the government take it to give away to whatever they want. Including people that don't pay taxes and just want a hand out instead of a hand. Reminds you of the guy on the corner with a sign "Will work for food", just don't offer me a job I just want a buck.
And yet that government takes it from you, neiman, and gives it to corporations and we hear nothing from you.
Cognitive dissonance. Look it up.
neiman "...people that don't pay taxes..."
Have you been following my posts about projecting things onto others? Eeesh! You better hope the IRS doesn't know how to see them. They would see something interesting in your posts.
I think Joe was talking about taxes and his fear that his taxes would be raised. More importantly Joe was just trying to stick it to a candidate and feel like he one-upped him. Unfortunately Joe didn't do any homework about the tax plans, because it sounds like he's a ways away from making $250k. Even more, he blatantly worries that lower people will be taxed, but it sounds like (again) he's a long ways away from the $250k barrier.
Also neiman, EVERYONE who works pays taxes that's just the way it is. Every pay check if you hadn't noticed, everyone's pay is significantly different from what they earned, taxes! Now, lots of low income folks get all that back at the end of the year, but that isn't a hand out. They worked and so they earned that tax refund. For some that's what they look forward to at the beginning of the year.
Stuart, if you really knew anything about economics you'd know that Obama's plan is worse than McCains, and McCains plan is really bad.
Both are promising tax cuts but both are promising massive amounts of spending. That means more unsustainable debt that we pass off to our children.
Obama's is worse because he has promised some 160 new spending programs which would be more costly than McCains dumb deal.
Joe worries about the American dream. That with hard work and some innovation you can succeed.
Progressive taxation punishes those who are successful. The more success you have the more you pay in taxes.
If progressive taxation is too high you can literally create a disincentive toward hard work, innovation, and success.
"Joe worries about the American dream. That with hard work and some innovation you can succeed."
Sure, a little hard work, some innovation, working without a required license and training, all these things add up.
Joe is a fraud. McCain doesn't appear to be a good judge of character. He seems to mistake black people for terrorists and white people as honest.
JohnE
"Required licenses" were put in place to keep low skilled labor from competing with high skilled labor. The goal is to keep the poor from competing with the more wealthy.
Is that what you want?
Licensing requirements make low skilled but hard working people outlaws or unemployed.
Joe is not a fraud, people like you either don't think through their policy positions or don't give a rats butt about the poor.
Actually, licensing is to protect the homeowner. That is all it is plain and simple. You get a license by passing some exams and meeting certain insurance/bonding requirements. Those are there for the homeowner and the worker. It allows the homeowner to go after contractors who don't finish work or do sub-par work. Is that what you want? A bunch of unskilled/low skilled people framing your house or doing plumbing without regard for possibly being sued or the various building codes needed in the construction industry. Plain and simple Joe should get a license. It makes your business more respectable and allows the contractor to advertise that he hasn't had any issues or violations against the contractor's board.
KDR81, such a veritable fountain of facts you are! THANK YOU for the education! Dang, I think we all should BOW to your undeniably superior intellect. Us lesser educated folk thought that licensing requirements were put in place to protect consumers from shoddy workmanship and fraudulent buisness practices, among other things. I DID NOT KNOW, for example, that we were just trying to keep the poor man down, which also means licensing requirements would be inherently racist. That's just wrong. I was also caught unawares that it neccessary held that if you are poor you are "low skilled", and conversely wealthy people are naturally "high skilled" laborors.
Poor Joe, he's just smart enough to have a whiff of something that could propel him to wealth but just not smart enough to figure out how to get there. Dangit! And I thought that was just darwinian nature. I was unaware that it's just mass conspiracy to hold back the poor by requiring licenses that are intended to weed out the hacks and protect consumers. Your theory is obviously right and mine is obviously hooey!
"Licensing requirements make low skilled but hard working people outlaws or unemployed."
Except for once teency point. Joe's potential customers have rights too. Like the right to expect that Joe is not a fraud and does have a license. Why? Because it's the law where they live. I.E. Joe is pretending to be something he is not.
It's like my right to expect that the driver next to me has a license to be driving. Why is that an important right, do you think? Because the DMV needs money and wants to oppress the poor? Or do you think there might be some basic skill issues at hand?
And let's not forget building codes. Nothing like spending thousands of dollars on a remodel only to find out that the "contractor", who did it, didn't know/understand code requirements. As a result the city tells you to rip it out at your own expense, or they simply condemn the building. Sweet, I mean Idiot, geez.
Good points guys, but that is the spin that is given to pass these laws. Have you guys ever questioned the fact that every attempt by government to expand its power has been in the interest of "protecting Americans." Let me guess, you guys are also whole hearted supporters of the Patriot Act?
Think about other hosts of licensing requirements: barbers, interior decorators.
I need to be protected from interior decorators?
"Oh my god, the roman shades don't match my duvet, and neither match my contemporary torchier!"
Are you babies or are you adults? Can't you make informed decisions for yourself?
If someone started a plumbing business and totally sucked at it he would be out of business. Word of mouth ads spread who is good. The state could have voluntary licenses for those meeting certain requirements allowing citizens to make the choice between the more experienced sure thing and something less expensive.
You can believe all regulation is to protect you, I disagree. You cannot deny that these regulations make things more expensive. Low-income people have to pay more for the service and low skilled people get put out of work.
And yes, licensing requirements can be racist. Take the barbering one...it look a libertarian law firm to sue the government so an African woman could open an African hair braiding boutique. The state wanted her to take over 1500 hours worth of hair cutting classes (for white peoples hair) before she could open her shop.
http://www.ij.org/index.php?option=com_c...
The state's licensing requirements to become a hairdresser were MORE STRINGENT than getting your pilots license!
How is that protecting the customer. Its clearly not.
Maybe other licenses for non-construction are silly, but construction involves the SAFETY AND HEALTH OF PEOPLE. Not to mention, that having a bad hair cut grows out. Having your foundation improperly poured can have your house condemned, or it can fall on your head and kill you.
Your arguments have some validity, but not in construction. There they are just flat out silly.
Here's an example of the need for licensing:
There was a "contractor" going around in the retirement communities here (Sun City, etc) and telling the old folks that they can have their spanish tile roof waterproofed or something of the sort. He would take the money, spray stuff on the roof (well actually a teenager would do it), and he would leave. The problem is that the tiles are already guaranteed to be waterproof for their lifetime. Basically he was a snake oil salesman. That's why we need licenses. And as already stated, it's there for bonding requirements (in case you know he messes up a part of the house badly) and building requirements (as in plumbing won't explode in your house). Honestly would you want a plumber without a license carving up the drywall in your house to replace the faulty kitec/rehau plumbing fixtures endemic to this valley? Gee I was losing water pressure, but now my pipes spray water and have developed mold in the drywall and insulation, SWEET.
Also there's the whole hazardous materials problem. Do you want a moron with no license operating an acetalene torch in your house? Or fixing your gas lines? Or monkeying with your electric grid? By all means do so, and when he does faulty workmanship, try to track him down or sue him to have the work properly redone.
This isn't a political issue, it's a safety one. Grow up.
If a company built homes that killed people they'd get sued for everything they're worth. They'd be done.
All building codes do is create saftey requirements that are above what is actually necessary to build a safe home. They increase the price and make it more difficult for low income people to afford it.
The government could issue certificates to builders who meet state requirements, allowing individuals to say "Do I want the more expensive but super safe house, or the less expensive safe, but not quite as safe house"
This only reason why we use the word saftey is because that is the spin that is given to raise prices and allow a group of people to charge us more than we actually should have to pay.
The difference between you and me, is that I value freedom and want people to have the freedom to choose who will build their house, who will do their plumbing and who will cut their hair.
You want a system that rewards wealthier people and hurts poorer people all in the name of "safety"
By the way, licensing for electrical saftey resulted in more electricutions, proving my point. Poorer people decided to do the jobs themselves instead of hiring a cheaper non-licensed electrician. Those people, with no experience, electricuted themselves and died.
Again, this isn't about saftey its about protecting profits and pricing out low income people.
Licensed carsalesmen try to sell us a paint protector on our cars that doesn't do squat.
Licensing does not stop fraud, it increases prices.
By the way, the only reason we have car dealerships is because government regulation protects them by outlawing us from buying cars from Wal-Mart, or even direct from the factory.
Car dealerships are a job that exist only because of government regulations, thus again, regulations increasing our prices. Enriching the wealthy at the expense of the poor.
Something tells me lil' KDR81 is a young one.
He has ALL SORTS of books and information sources at his disposal and he's a reader, but he's got little life experience to give him any indication as to whether any of it is true in practical application. Intellectual theory and opinion.
There is so much for you to learn, grasshopper; the fountain of wisdom, however, does not flow from your parent's tap. You must sprout wings, leave the nest, and life will kick you in the ass so many times you will learn many lessons, grasshopper.
Gmag,
Thanks for the advice but I arrived at these conclusions from carefull study of books and real life.
And it is I who is reshaping his parents thoughts.
Btw, I'm now living in my 5th state since graduating high school many moons ago.
Shoot, I was hoping for your sake you just needed some seasoning. You don't have the folks tied up in the living room, do ya? They must be so thankful for the "reeducation".
Well I guess with fewer building regs and no licenses, I can trust builders will keep my house at a good fire rating, ready for earthquakes/other natural disasters, and all that good stuff.
Or without a licensing board, I'll just have to trust his references. And trust he's good to his employees, that he doesn't cut corners while building.
Well I guess ignorance is bliss.
So people have to die in order to put a "bad company" out of business?
Yeah, let's do it the KDR81 way! Darwin was right!
/sarcasm off
KDR81, most people don't KNOW if a building is just safe enough, overly-safe, or not safe at all. That's why there are LICENSING REQUIREMENTS - to PROTECT PEOPLE from UNSCRUPULOUS CONTRACTORS.
Sorry this basic point seems to escape you.
There are tons of UNSCRUPULOUS CONTRACTORS who are licensed.
Licenses do not prevent bad and crooked people from going into businesses.
Also, licensing does not prevent unqualified people from getting licensing. They either cheat or bribe some offical into getting the licensing.
Licensing is just another way for the government to get revenue and it gives people a false security into thinking that this or that person is qualified and safe to do the job.
The doctor's office that give all those patients Hepatitis was licensed.
Redf, gmag, patricia, etc
You all can still choose to get a "licensed" builder (or whatever).
You see, when people have real freedom, they have the freedom to choose.
You can pay extra. You want people to have all sorts of safety but you want to ignore the costs. Basically you want everyone to have a Lexus but you turn your back on those who cannot afford one.
Do people have to die for a company to go under, nonsense. But even, in my worse case senario, that was the only way...you are still trading people's homes and their freedom for a little bit of extra saftey.
So yes, you are willing to put poor people on the street, keep them out of work, or make them pay more, just so you can feel a little safer.
Its easy to ignore the pain you've cost when you don't have to stare it in the face.
Not a single one of you has addressed my concern. The cost. You are willing to throw out the fact that the poor cannot have a home or a job on the off chance that that home might kill them.
Are any of you going to get realistic and admit that the licensing causes prices to go up?
Btw, often the licensing boards are made up of the very people supposedly being regulated.
So the government is protecting us by using the contractors to regulate themselves. Replace that with doctors, hair dressers, barbers, message therapists, interior decorators etc etc etc.
All they are doing is regulating their competition away. Safety is a word they throw around to get people suckered into believing the garbage they spew and to support the higher prices.
Nance - "licensing does not prevent unqualified people from getting licensing."
Do you fly with unlicensed pilots? How about the last Southwest Airlines captain, did you ask to see her license when you boarded? I'm sure you not only didn't ask about it, you didn't give it a second thought.
We're not talking about absolutes and polarities here. We're talking about a reasonable approach which helps to prevent problems. The idea that we don't need licensing because sometimes it does not do what's intended seems ridiculous.
Your price argument is ridiculous. A good contractor, especially now, will give you rock bottom prices.
In any case, YOU have not answered my points.
1) Do these unlicensed people know the building codes necessary to build a structure?
2) If your claim is that these codes are unnecessary, have you looked at say Turkey? Yeah all those houses that aren't built to our code get leveled in an earthquake. Sweet. Or fire rating, would you like to sleep easy at night knowing that maybe your garage isn't rocked to fire code, or the unit next to you in an apartment may start a fire which will gut the building faster because wall weren't built to fire code? For that matter sprinkler systems in public buildings. You want to go to a theater that wasn't built to code, with no real emergency exits? Or exits that open inwards and not outwards?
3) You haven't addressed the concern that a non-licensed person screws you, he can leave. With no real business, but the back of his truck, he can walk away with no way to track him down. With licensing, he will get caught in another state.
4) This libertarian BS about freedom is moronic. This is about protecting all involved. Protecting the homeowner from fraud/giving them outs to correct these problems. Protecting workers under the contractor so that they are covered by his insurance. Protecting the contractor so that if someone doesn't pay, they can go after him. Of course if you still feel that licensing is the case, why don't you go find an unlicensed pilot as john said to take you across an ocean? Or why don't you go to an unlicensed physician for an organ transplant or another serious surgery?
"Do you fly with unlicensed pilots? How about the last Southwest Airlines captain, did you ask to see her license when you boarded? I'm sure you not only didn't ask about it, you didn't give it a second thought"
It still does not prevent from having incompentent or unqualified pilots.
People cheat all the time.
They cheat on test and I am sure there are "pilots" who cheated the system and got a license without fulfilling all the requirements or passing all the test. Cheating on test is fairly common these days.
Southwest has an out. If a pilot turns out to be a cheater and crashes a plane then they can just point to the FAA and say the FAA gave him a license.
Also, just because a guy got a license to fly a big jet does not mean he is truly compentent to fly a big jet.
I am not saying to do away with licenses but it is not as helpful as people think and it adds to cost of doing business.
Excessive licensing probably does nobody any good and just jacks up the cost of goods and services.
"It still does not prevent from having incompentent or unqualified pilots."
Actually, nearly as I can tell, it does.
I am a pilot (uh oh, I can here your backlash already) and can tell you even a simple license is not easy to obtain and not simple to maintain. You cannot fake the tests because you have to demonstrate real abilities. You cannot cheat and perform an accelerated stall, for example. Memorization is not going to help you know what to do.
The rest of your post, essentially, I agree with. We could argue on the FAA thing, but it's way off topic.
If you think that nobody cheated at least some to get some pilot certification then I got some sub-prime mortgages to sell you.
I sure somebody probably failed some part of a flight test but their buddy was giving them the test and just let it slip by.
I am sure some pilots have cheated on the written exams, too.
I worked in the airline industry and been around pilots. I am very confident there are some pilots that are barely compentent to fly and some do not get weeded out in time before a major accident. I am sure a few of those unqualified pilots jigged the system to get their foot into the door.
I have highly confident that pilots rig or fudged their flying times to get qualified for certification.
I believe most accidents are due to pilot error but I would agree that most of them are compentent qualifed pilots that just made mental errors.
The US airline industry is one of the most regulated industries in the world. But everything is very costly. For example, ice buckets for an airline cost over $200 each. They have to be made to specs and so it removes the economies of scale that make normal ice buckets cost around $10.
I just wonder how many potential pilot jobs are destroyed because of the over regulation.
"I sure somebody probably failed some part of a flight test but their buddy was giving them the test and just let it slip by."
Geez nance, I get your point. But that's like saying 4 questionable votes out of 28,000 shows that someone is trying to rig an election. Not...exactly...
"...ice buckets for an airline cost over $200 each."
What??? Stop saying silly stuff. It blows your entire credibility, which is already in question here.
Airlines are free to use any kind of ice buckets they want, or none at all. However, the airlines might need them made a certain way to fit within their own standards and planes, and that could make them somewhat (but not $200) more expensive. But the FAA nor anyone else regulates the freekin' ice buckets.
A friend of mine once said something similar about pilots not being allowed to drink diet coke before they fly because of the effects of Aspartame. Show me that in the FARs! I said. I drink it WHILE I'm flying. It didn't matter, she just kept repeating the story even after I corrected her because she had this thing about big companies like JD Serle profiting by making people sick. Okay, but what if people aren't getting sick and your beliefs are wrong??? You're creeping people out for nothing!
I guess that's human nature. And maybe your story is one of those kinds of myths. But it's a new one to me. Maybe we should ask Penn & Teller? :)
Here is part of the Federal regulations that deal with ice buckets on commerical airliners.
There was pages and pages about ice and containers.
This is just one section,
3.7 ICE STORAGE: Drawers, wells, or containers used for the storage of ice shall be
constructed of CORROSION-RESISTANT, DURABLE, EASILY CLEANABLE, NON-ABSORBENT,
NON-TOXIC, SMOOTH material. Drawers, wells, and multi-use ice containers shall be
equipped with READILY REMOVABLE liners or inserts or be themselves readily removable for
cleaning. ALL INTERNAL ANGLES AND CORNERS of ice storage drawers, wells, and
containers shall have a minimum continuous and SMOOTH RADIUS of at least 1/8 inch.
Where ice wells are accessible through the galley counter top or food service cart counter
top, the opening into the storage space shall be protected from the entry of spillage.
"There was pages and pages about ice and containers."
Wow! You're right. Holy cow, that's crazy stuff. My bad. This did not exist when I studied for FARs.
Is that where you got this?