Final Presidential Debate - Who Let the Dogs Out?

William Ayers. ACORN. Joe the Plumber. All the old and new dogs were in the house tonight.

Joe the Plumber is the main topic of discussion. Poor Joe. He is only making $250,000 per year. Remind me not to feel sorry for plumbers. Joe the Plumber is Joe Wurzelbacher, a plumber from Holland, Ohio who expressed concerns to Obama during a campaign stop this past Sunday that if Obama were elected, Joe's taxes would go up when he buys the small business where he has worked for several years. You can hear the entire dialog between Obama and Joe the Plumber and decide for yourself.

So, the economist in me kicks in and tries to clear up a few things. Even though Obama uses the phrase "revenue of $250,000", I really don't think that is what he means. For a small business like Joe's, the profit (revenue minus expenses) of the business pulls directly over into his own taxes. The marginal tax rates of 36% and 39% that Obama refers to are marginal tax rates on Taxable Income (Line 43 on the 2007 1040 Form). Now if Joe has only $250,000 of total revenue (charges to his customers), there is no way he carries all of it over to his tax return as taxable income. He has to have expenses (materials, insurance, rent, vehicle, etc.) and may also have other employees for whom he has payroll, insurance and many other expenses. So the only way Joe gets hit by these higher marginal tax rates is if he is CLEARING more than $250,000. Even then, on your tax filing you have deductions for your dependents, property taxes, mortgage interest, child tax credits, etc. If after all of these deductions, Joe's taxable income is still above $250,000, well, that puts him in the top 5% of all wage earners in America, so even though he works long days, let's not feel too bad for him. Also this tax increase from the current 35% is a 1% increase (to 36%) on taxable income above $250,000 and then a 4% increase (to 39%) on income above some higher level. So lets say Joe is really making $350,000 after all tax deductions. For this $100,000 above the $250,000, his taxes will go up by about $2,000 over the current tax structure. For a guy making more than a third of a million a year, he shouldn't cry over $40 per week less in his paycheck. (Getting down from my soapbox now)

Some observations as they occurred last night:

A switch from talking about taxes to deficits. I don’t know yet what they want to do about health care, but we are already talking about a hatchet and a scalpel, so I am a little concerned. McCain made a passing yes to whether he could balance the budget in his first 4 years (I doubt it will be that easy, especially with all the tax cuts he is referring to).

Good comeback from John McCain on Barack Obama not running against George Bush and if he did want to run against Bush, he should have done that 4 years ago. It sounded like he said 3 years ago when I first heard it, which was kind of funny.

McCain scoring some points going head to head with Obama. Some good scripted points, putting Obama on the defensive, but Obama is often not responding directly and engaging in the battle.

On CNN, there are once again big difference in the scores between the men and women from the Ohio Uncommitted Voter group on most answers. The men are often scoring McCain higher and again the women are scoring Obama higher.

McCain putting out all the dogs. William Ayers. ACORN. McCain saying that the American people should judge when the facts are out there. Well the uncommitted Ohio voters, men and women voted a rare negative as McCain was saying this. Once again, regardless of the debate jab points that McCain seems to be making, but the all-important uncommitted voters just plain don't care, they want answers on the economy.

The running mate question. Could have sworn that was a setup from the Democrats. Obama didn’t touch criticizing Sarah Palin, just talking about Biden. When McCain spoke about Palin, men were voting very highly, women were flat on zero. This echos how they voted during the VP debate whenever Palin spoke. She is NOT bringing in women to vote for the Republican party.

Energy dependence. Both bailed a bit on the question of reduction of importation of oil during their first term. Both agreed instead that over a longer period of 8-10 years, could eliminate need for oil from ME and Venezuela.

Roe v Wade talked about a lot during a debate. It has been a while since we have seen that. This is not an issue that will help McCain appeal to uncommitted voters who tend to be moderate and are much more likely to be Pro-Choice. To a Pro-Choice person, the term Pro-Abortion is pretty highly offensive, so I think this issue really moved uncommitted voters into Obama's category.

Education - vouchers vs. charter schools. Just too complex a topic for anything of value to be said in 9 minutes and most people have no idea what will really work, they just want things to get better.

On the whole, it seemed like McCain did a pretty good job. If I had to award the debate to one of them, I may be more likely to give it to McCain because he was constantly on with great responses, he was sharp and on message. However, several polls after the debate showed an overwhelming (20% or more difference) advantage to Obama. This was pretty stunning to me. It means that most people have made up their mind and the undecided really don't care about the so-called "character issues". They just want to know who will be focused on making their lives better. For a while after the debate, I was thinking McCain, may have just turned momentum his way and this could get closer. The post debate polls tell me this could easily become an Obama landslide.

Reminder that tonight (Thursday, 10/16) at 9:30PM, Saturday Night Live runs their 2nd of 3 Thursday night half hour News specials on nothing but the election. No doubt there will be a takeoff on last night's debate.