Ed Gillespie, left, is a Republican running for governor of Virginia. His Democratic rival is Lt. Gov. Ralph Northam. (Bill O'Leary/The Washington Post)

When it comes to politicians promising tax cuts, fiscal beauty is definitely in the eye of the beholder.

A Richmond think tank estimated this week that the tax cut promoted by Republican gubernatorial candidate Ed Gillespie would cost $1.4 billion when fully implemented and would result in only modest savings for middle-income Virginians.

That's because the Commonwealth Institute for Fiscal Analysis rejected some of the revenue assumptions built into Gillespie's plan and used a stricter definition of middle-income.

The left-leaning institute also found that the more modest tax cut floated by Democratic candidate Ralph Northam could drain $381 million from state coffers when fully implemented and could hit local governments to the tune of $254 million.

"Tax cuts sound good in a campaign platform, but their costs in foregone investment or cuts to public services must also be considered. Failure to do so amounts to basing public policy on nothing more than wishful thinking," the institute's research director, Laura Goren, said in the report.

The nonpartisan institute, based in Richmond, focuses on social issues that affect low- and moderate-income people. Its report refused to accept some of the projections in Gillespie's plan for a 10 percent across-the-board tax cut; that proposal was written in consultation with the right-leaning Beacon Hill Institute, a Boston think tank.

Gillespie's plan says the tax cut would take $1.3 billion from projected state revenue growth — essentially the same cost identified by the Commonwealth Institute. But the candidate says that would leave enough revenue growth to continue funding obligations such as education and public safety, and he promises to build in "triggers" that would make the cuts contingent on revenue hitting certain levels.

The Commonwealth Institute said such triggers address only when to implement the cuts, not whether they would make fiscal sense, and said there is no way to know how obligations will grow and whether the state's anemic revenue flow would be able to absorb such a cut.

Gillespie also promised that his cut would "lead to $1,285 in additional disposable income for a household of four" when fully enacted.

Some fellow Republicans, including primary challenger state Sen. Frank W. Wagner (Virginia Beach), have questioned that math, pointing out that it's based on an annual household income of $135,000.

Virginia general election guide

Average household income in Virginia is about $90,000. Median income — the midpoint that some critics call a more meaningful measure because it is not skewed by extremes in wealth or poverty — is about $65,000.

The Commonwealth Institute brushed off Gillespie's income assumption, as well as the idea of basing the projections on "macroeconomic stimulus effects that are controversial among economists" — such as the idea that cuts will lead to more growth that will lead to more revenue.

The report also looked at the business and income tax cut proposals of Libertarian Party candidate Cliff Hyra, which go even further. Depending on specifics that the institute said are not clear in Hyra's plan, his cuts could carry a price tag of between $3.1 billion and $5.2 billion.

Republicans have criticized Northam's tax proposal as vague and lacking specifics.

The Democrat has called for eliminating the state's 2.5 percent grocery tax for low-income people and wants to form a bipartisan commission to study comprehensive tax reform. The institute found that Northam's proposal would be difficult to implement because retailers would have to be able to identify low-income customers.

Simply eliminating the tax across the board could cost the state and localities nearly $650 million per year. A low-income household would get about $63 in annual savings, and a middle-income household about $136.

Rather than look at cuts, the institute suggested considering what might be paid for with that money — hiring teachers and substance abuse counselors, assisting with student financial aid, funding local improvement projects and more.

Laura Vozzella contributed to this report.