The nonpartisan Tax Policy Center released a report yesterday that explains in detail the effect that a McCain presidency and an Obama presidency would have on the tax bill for American households. The data are stratified by income range and reflect a wide difference in stated policy between the two candidates.

In addition to making the 2001 and 2003 tax cuts permanent, McCain says he would double the exemption for dependents, lower the corporate tax rate, make expensing rules more generous for small businesses and lessen the bite of the estate tax and Alternative Minimum tax.

The net result: compared with their tax bill today, taxpayers on average would see their tax bill cut by nearly $1,200. That means their after-tax income would rise by 2%...

Obama’s plan would keep the 2001 and 2003 tax cuts in place for everyone except those making more than roughly $250,000, and he would increase the capital gains tax. Obama would also introduce new tax breaks for lower and middle-income groups…

The net result: compared with their tax bill today, taxpayers on average would see their tax bill cut by nearly $160 under Obama’s plan. That means their after-tax income would rise by 0.3%.

It’s also worth noting that McCain’s plan calls for the biggest percentage (that is, most meaningful) tax decrease for the highest earners while Obama’s allows the lowest income earners to receive the biggest break.

This table from the Tax Policy Center study illustrates how after-tax income will change in 2009 if either of the candidate’s tax policies are enacted. A lower after-tax income indicates higher effective tax rates due to a variety of proposed changes to the tax code.

A chart provided by CNN Money defines the income ranges more succinctly and provides hard numbers. I fall in the middle, and would hypothetically see a decrease in my tax bill amounting anywhere from about $1,000 to $2,600 depending on how much I earn and who ends up in office.

This speculation is interesting but mostly academic. These figures are not absolutes for three reasons. First, we’re dealing with politicians, so their proposals might change as they hammer out details, talk to advisers, and determine what strategy will get them into office. Second, their opinions may change once the winning nominee is sworn in to office. Third, any policy changes have to find their way through Congress first, where compromises must be negotiated before anything gets done.

So take these predictions and studies with a grain of salt.

A Preliminary Analysis of the 2008 Presidential Candidates’ Tax Plans [pdf], Tax Policy Center, June 11, 2008.
What They’ll Do To Your Tax Bill, Jeanne Sahadi, CNN Money, June 11, 2008.