EconomistMom.com

The Tax Policy Center just updated their estimates of the cost of the Obama and McCain tax plans–estimates that show that the Obama tax proposals would reduce revenues by $2.7 trillion over ten years (same as their previous estimate), while the McCain tax proposals would reduce revenues by $3.6 trillion over ten years (slightly lower than previous $3.7 trillion).  As I’ve pointed out before, these are the revenue loss amounts compared with the official CBO baseline under current law, and as such, these are the revenue losses that matter if one is determined to comply with the pay-go rules.  (Revenue neutrality becomes very hard to do.)  Note that the total cost of these proposals, with debt service (interest on the added debt), is even higher ($3.3 trillion and $4.3 trillion for Obama and McCain plans, respectively). 

Both candidates want us to compare their tax plans not with current law, however–which after all, corresponds to a bizarre, unrealistic policy path where all of the Bush tax cuts expire after December 31, 2010–but to a “current-policy-extended” baseline, which assumes the 2001 and 2003 tax cuts and AMT relief are permanently extended.  Compared with the revenue loss under the ”policy extended” baseline, Obama’s tax proposals raise $262 billion over ten years, while McCain’s lose $615 billion.  (In other words, extending the Bush tax cuts costs $3.0 trillion over ten years compared with current law.)

So in aggregate, at least in terms of tax cuts, McCain loves taxpayers (even) more than Bush loves taxpayers, and Bush loves taxpayers more than Obama loves taxpayers.  All of them are not so fond of our children and grandchildren though, because they’re all willing to have our children and grandchildren (aka future taxpayers) pay for all that love they’re willing to give to us current taxpayers.

But how much the candidates love you, in particular, depends a great deal on how “rich”, or not, you are.  With his tax cuts, Senator Obama loves those who are not so rich a lot more than he loves those who are.  Senator McCain, on the other hand, really loves the really rich.  In fact, with his tax cuts, Senator McCain loves the really rich even more than President Bush has loved them.

Here’s what I mean, from Tables 3 (pg. 25) and 8 (pg. 31) of the Tax Policy Center’s preliminary analysis of the candidates’ tax plans:

Under Senator Obama’s tax proposals (not including the Social Security payroll tax increase, by the way), compared with the policy-extended baseline (so relative to the Bush tax cuts permanently extended):

• Lower-income households, those in the bottom 20% of the income distribution with income less than $19,740, would receive an average tax cut of $617 in 2012–a 5.4% increase in after-tax income;
• Middle-income households, those in the middle 20% with incomes between $38,980 and $69,490, would receive an average tax cut of $969 in 2012–a 2.0% increase in after-tax income;
• High-income households, those in the top 20% with incomes above $117,535 (so mixing the sort-of-rich with the ultra-rich), would face an average tax increase of $7,748–a 3.4% decrease in after-tax income.
• Really-rich households, those in the top 1% with incomes above $619,561, would face an average tax increase of $133,715–a 9.4% decrease in after-tax income.
• Ultra-rich households, those in the top 1/10th of 1% with incomes above $2.8 million, would face an average tax increase of $789,241–a 12.4% decrease in after-tax income.

Now, this really looks like Obama hates rich people, but to be fair, you should look at Table 2 (pg. 24) in the Tax Policy Center analysis, which compares the distribution of the tax cuts to the current law baseline.  If you look there, you’ll see that Obama still “loves” rich people (gives them tax cuts) more than current law (with tax cuts expiring at the end of 2010) does.  It’s just that Obama doesn’t love rich people nearly as much as President Bush loves rich people, and in fact, even relative to current law (expiring tax cuts), Obama doesn’t love the really rich people or the the ultra rich people. 

And if that’s testimony to how much President Bush has “loved” rich people with his tax policy, well, he hasn’t loved them nearly as much as Senator McCain would love them…

Under Senator McCain’s tax proposals, compared with the policy-extended baseline (so relative to the Bush tax cuts permanently extended):

• Lower-income households, those in the bottom 20% of the income distribution with income less than $19,740, would receive an average tax cut of $20 (yep, 20 bucks) in 2012–a 0.2% increase in after-tax income;
• Middle-income households, those in the middle 20% with incomes between $38,980 and $69,490, would receive an average tax cut of $282 in 2012–a 0.6% increase in after-tax income;
• High-income households, those in the top 20% with incomes above $117,535, would receive an average tax cut of $2,826–a 1.2% increase in after-tax income.
• Really-rich households, those in the top 1% with incomes above $619,561, would receive an average tax cut of $31,628–a 2.2% increase in after-tax income.
• Ultra-rich households, those in the top 1/10th of 1% with incomes above $2.8 million, would receive an average tax cut of $190,653–a 3.0% increase in after-tax income.

And remember, those are tax cuts above and beyond the tax cuts from President Bush.  (See Table 7 (pg. 30) to compare the McCain tax cuts with current law.)

So, who loves you the most?  If my husband and I were childless and selfish, McCain loves us the most–even more than the President has loved us.  But with the four future taxpayers I have to worry about, I think I could use a little less lovin’ from all of these politicians.