Spreading The Wealth

To the Editor:

Caution! Taxpaying American’s should pay attention to “Joe the Plumber’s” question to Senator Obama: “You are going to raise my taxes aren’t you?” Obama’s answer: “I’m going to spread the wealth around” should cause concern to small businessmen and their employees. My neighbor and I did nothing this week. You work hard for 40-plus hours. That’s not fair. You need to share your income with us. Spread the wealth around!

Obama’s answer should be eye-opening as much as his team’s ridicule of McCain fighting for a plumber because it shows what Obama thinks of America’s working Middle Class regardless of his claims. Obama’s views are far from JFK’s words, “Ask not what your country can do for you but what you can do for your country.”

My brother-in-law, a Democrat, liked Obama until Joe the Plumber incident. He was previously a tradesman with a framing crew in Connecticut, building houses for some 15 years. Today he’s president of a small engineering company with 20-some engineers. The Joe the Plumber incident opened his eyes and hit a raw nerve. His points are two, 1) Obama’s answer isn’t about caring for widows and orphans. 2) Obama’s clueless about small business facts and effects of excessive tax increases.

A plumber (or any tradesman) with three employees plus himself has to gross way over $250,000 or they’re insolvent. Consider a plumbing business with an owner plus three employees. Two would be assistants, earning approximately $40,000 each. The third might be a lead journeyman plumber earning about $60,000. The owner might earn approximately $80,000. This alone adds up to some $220,000. Throw in FICA taxes for the employees, workman’s compensation insurance costs, Obama’s new health insurance costs that employers will have to pay or pay a surcharge, liability insurance, truck payments, gasoline at over $80 per truck daily, raw material costs for pipes, fixtures, etc.

The bottom line is this described small plumbing operation needs to gross over $390,000 just to stay  in business and pay all the taxes, insurances, and overhead. Currently the corporate tax rate is 35 percent but Obama wants to increase that to 50 percent. That is not just a 15-point increase. A 15-point increase is a 42 percent tax increase.

Businesses can’t pass along increases greater than five percent to customers without losing business. Customers will walk away, not buying or buying from a lower cost competitor. High costs caused Starbucks to close 1,600 stores nationally, because people chose to stop buying at high prices.

Today 70 percent of our nation’s business is small, under $6 million yearly. Economists warn Obama’s excessive tax increase on about 80 percent of all small businesses will likely sink the other small business not already in the toilet. Many people everywhere will be losing jobs.

Do you thank excessive tax increases on some will solve our financial crisis? Will it sink your business or cost your job? Should politicians in a Left or Center government be spreading your wealth around?

Christel Kormanik

Vice President Construction Financing

Sterling Lending

85 Great Ring Road, Sandy Hook                             October 22, 2008