AGI = adjusted gross income. *Subject to indexing for inflation since 2009 (except for health care reform taxes) and other adjustments.
Sources: U.S. Dept. of the Treasury; mittromney.com; CCH Inc.; various news sources

A Different Drum
Romney seeks to cut Bush's historically low ordinary rates by 20%, thereby felling today's 35% top bracket and chopping it to 28%. He would simultaneously repeal the alternative minimum tax. Without repeal, "the AMT would reclaim much of the tax savings" from the rate cuts, according to the nonpartisan Tax Policy Center in Washington, D.C.

Regarding investment income, not only would the former Massachusetts governor preserve the current 15% rate on capital gains and qualified dividends for high earners (both are 0% for individuals making less than $200,000), he would extend the zero bracket to interest income. "He's also shifting to a higher threshold," says David T. Mayes, president and chief investment officer of Mackensen & Company Inc., a fee-only advisory in Hampton, N.H.

Joint filers with adjusted gross incomes below $200,000, as well as single filers under $100,000, would pay no tax on their interest, dividends and capital gains if the challenger had his way.

This landscape would mandate new approaches to investing. Municipal bonds would lose luster, for instance. Lower marginal rates render tax-free income less valuable, all else being equal, Mayes says.

For clients below Romney's threshold, paying no tax on investment income would make taxable accounts more attractive relative to traditional 401(k)s or individual retirement account. Without taxes on investment earnings, "a taxable account is much like a Roth account without the annual contribution limit," Mayes says.

But pledging to cut taxes means "it's probably going to cost someone some money," points out Luscombe, and so far Romney isn't saying who. "Romney has talked about spending cuts and eliminating tax breaks to broaden the base, but he hasn't specified the breaks he'd eliminate," Luscombe reports. It's speculated that the deductions for home mortgage interest and charitable contributions are on Romney's hit list. He could otherwise tamper with the earned income credit and child tax credit.

Estate And Gift Tax Proposals
In the transfer-tax arena, Obama wants to party like it's 2009. With one important exception, he seeks a return to that year's higher estate, gift and generation-skipping transfer tax parameters, namely a 45% rate for all three taxes, a $3.5 million estate and GST tax exemption, and a $1 million gift tax exemption, says estate planning attorney Steve Oshins, of Oshins & Associates LLC in Las Vegas. The exception is the spousal portability of unused exemptions, a goody Obama wants to preserve that came into the code with the 2010 tax act.

The president's plan, if implemented, would cause the estate-tax-free amount to decline from its current $5.12 million height. That would increase the number of estates owing death tax as well as the amount of tax they owe, which would also increase the need for estate-planning advice.

Romney's opposite goal of killing off the death tax once and for all might save the heirs of affluent clients a lot of money, but it could hurt planners' business by dampening demand for life insurance, valuation and trust services, and even charitable-planning advice, since gifts could decline. "Philanthropic giving is often driven from an estate tax perspective," notes CPA Blake Christian, a tax partner at HCVT LLP in Long Beach, Calif.

On Corporate Tax Reform
Some similarities actually exist between the candidates' corporate tax planks. Both wish to make permanent the expired research and experimentation credit, for instance, and both believe the corporate tax system desperately needs repair.