This has been a difficult campaign season. There has been plenty on which to write, especially over the last few days. But with so many people so engaged by this presidential campaign, it’s been hard to find an angle that doesn’t amount to “piling on.”

Then again, perhaps piling on is what’s called for here. As Rome burns, we spend countless hours talking about lipstick, babies, Wasilla’s strip mall city hall and all manner of nonsense. Just as George W. Bush makes his father look like Winston Churchill, John McCain may prove to be the best thing to ever happen to Emperor Nero’s legacy.

Yet despite all of the issues we should be focusing on – our dwindling global leadership; ballooning deficits; rising unemployment; collapsing banks; increasing tensions with Russia; deteriorating conditions in Iraq & Afghanistan; the list goes on, and on, and on – at the end of the day, one issue and one issue only will decide which way millions of americans vote: Taxes.

Most reasonable people will agree that taxes are the price we pay for a civilized society. The military, roads, police and fire protection, public education, social security, etc. all cost money; and we really can’t go without any of them. It’s the “waste” that people want to do away with.

Well what is the waste exactly? Ah, well now we wade into the murky waters. Many argue that the $10 billion per month we’re spending in Iraq is a waste. Others believe that money spent on welfare and medicaid should go by the wayside. Some claim we’re spending too much on public schools. And there are even some that want to see Social Security killed. And of course, there are all of those evil earmarks.

It’s certainly a lot to get one’s arms around; and it’s made even more difficult by the fact that, despite all of the furor, most Americans can’t tell you how much tax they pay. Moreover, if you ask how much tax they’ll pay under each presidential candidate’s plan, the answer will almost surely be one of two words: “More,” or “Less.” Where are we now?

Currently, Americans pay taxes according to the 7,500+ page tax code, which was most recently amended by President George W. Bush’s tax cuts in early 2001 (which were later extended).

Republicans argue that under the Bush tax plan, everyone received a tax cut; and that as a result, companies have more money to invest in growth and job creation, and the average American has more money to invest in stocks, mutual funds and IRAs.

With few exceptions, it hasn’t exactly panned out that way. Conservatives argue that the tax cuts benefitted all Americans, but the reality is that the meager benefits enjoyed by middle income earners have been overshadowed by the increasing gap in income inequality. A family earning the middle-income average of $56,200 received a rate cut of a little less than 2% and saved $1,180 per year in taxes; while at the same time, a household in the top 1%, earning $1.25 million, enjoyed a tax rate cut twice as deep and saved $58,000.

Add to the mix the fact that the Bush tax cuts are paid for with borrowed money, contributing to our national debt. For the wealthiest one percent residents, the tax cuts they’ve received from 2001 through 2006 comes to over $60,000 per family member, while their debt burden is roughly $40,000. That’s a net gain of $20,000. 

But for the other 99 percent, their share of the added debt outweighs their tax saving by an average of around $7,000 per person. They have received an average tax break of $2,600 per person over the same six-year period, but their added debt burden averages $9,700 per person.

Moreover, the tax cuts have produced a ripple effect, resulting in less money being distributed to individual states. So while federal income taxes have gone down, the savings for the majority of Americans have been eaten up by increases in state and local taxes to make up the shortfall. This is a big problem for residents of some states, like Florida and New Hampshire, that have no state income tax and must raise regressive sales and property taxes to compensate, further widening the income gap. In addition, many state budgets have been slashed, particularly in areas of public education and social services, which also disproportionately impact lower-income families.

It makes it hard to argue that tax cuts are truly good for the economy.

So who has the right idea?

The current tax situation is difficult to dissect, but it’s nothing compared to the proposed tax policies of Senators McCain and Obama.  Here the challenge is getting past “the sell,” and uncovering the hard data. It’s also important to remember that these are “proposed” policies, and that the actual legislation may be very different once it winds it way through Congress.

Let’s start with what they have in common:

Both candidates have proposed tax plans that would substantially increase the national debt over the next ten years, without providing any significant increase in economic growth, unless they are offset by spending cuts or other tax increases. Neither side has indicated what those spending cuts or tax increases might be.

Doesn’t sound promising. Let’s look at the details, according to non-partisan Tax Policy Center:

Senator Obama’s plan would reduce taxes for most families, but raise them for high-income taxpayers. By 2012, middle-income taxpayers would see their after-tax income rise by about 5%, or nearly $2,200 annually. Those in the top 1% would face a $19,000 average tax increase, a 1.5% reduction in after-tax income.

Senator McCain would lift after-tax incomes an average of about 3%, or $1,400 annually, for middle-income taxpayers by 2012. But, in sharp contrast to Obama, he would cut taxes for those in the top 1% by more than $125,000, further raising their after-tax income an average 9.5%.  

Unfortunately, there isn’t enough data currently available to project the impact on the per capita debt burden, but it seems safe to say the McCain plan would result in a significantly greater deficit for 99% of Americans. 

Then there are the various promises the candidates have made on the campaign trail.

Senator McCain’s has proposed to create an optional simplified individual income tax system would increase the cost of his plan by more than $1 trillion over 10 years. We’ve yet to hear any details, but it is likely to be very similar to the plan proposed made by the Republican Study Committee.  

Senator Obama has proposed raising the payroll tax for those earning over $250,000. Again, he has not provided details, but assuming this would be a 2 percent income tax surcharge on adjusted gross income above $250,000 and an additional 2 percent payroll tax for employers on each worker’s earnings above those levels. Such a plan would increase taxes on high-income workers by nearly $400 billion over a decade, but at the same time would shore up the struggling Social Security system. 

Finally, there is the impact of each candidate’s health care proposals. We don’t know the details yet, but we can make some assumptions based on what we’ve heard so far.  

The McCain plan would replace the current exclusion for employer-paid premiums with an income tax credit of up to $5000 for anyone purchasing health insurance. This and other proposed changes to the healthcare system that would increase the deficit by $1.3 trillion over 10 years while only modestly reducing the number of uninsured by 1 million in 2009 and 5 million by 2013. Those benefits would also diminish as the rising cost of premiums outpaced the tax credit. 

The Obama plan makes relatively low-cost insurance available to everyone through non-group pools and subsidize premiums for low and middle-income families, at a cost $1.6 trillion, but would also cover virtually all children and many currently uninsured adults.  This plan would reduce the uninsured by 18 million in 2009 and 34 million by 2018.

Obama’s plan gives us the most bang for our buck, but at the end of 2018, it still leaves 38 million uninsured. The McCain plan leaves millions more out in the cold, but according to his advisors, so long as we have emergency rooms, no one is truly uninsured.

The bottom line.

If you’re wealthy, you stand to personally benefit more by electing Senator McCain. Those short-term gains come, however, at a high long-term cost to the nation’s overall economic health. For a candidate that campaigns on the credo “Country First,” it’s hard to reconcile McCain’s commitment to that belief with his proposed economic policies.

If you’re in the majority of Americans making less than $1.25 million per year – and especially part of the 40% making less than $35,000 per year – you stand to benefit more, both in the short and long-term, from Senator Obama’s plan. Admittedly, for the top 1%, the Bush party would be over; but no knowledgeable person can argue that maintaining such a wide income gap is good for our country’s economic health.