I have copied and pasted the following summary from CCH Tax Research NetWork.
Whichever candidate is elected in November, there are likely to be big changes proposed to the tax code. The presidential candidates' proposed tax policies include changes to individual and business income taxes, the estate tax and Social Security. For individuals, Sen. Obama would provide expanded credits for families, savers, homebuyers and clean vehicles; Sen. McCain would double the personal exemption to $7,000 and extend and index the increased alternative minimum tax (AMT) exemption amounts.
On the business side, both Obama and McCain seem to support reducing the corporate tax rate; McCain proposes a corporate tax rate of 25 percent. However, the candidates differ on the estate tax with Obama favoring the status quo, a top rate of 45 percent and a $3.5 million exemption, while McCain proposes a top rate of 15 percent with a $5 million exemption. The candidates also differ greatly on the issue of Social Security: Obama favors the current structure, with an increase in the payroll tax to pay for it, and McCain favors personal accounts for younger workers.
Individual Income Taxes
Obama proposes a $1,000 tax credit for families with incomes between $8,000 and $75,000 ($500 for individuals). He would extend the current marginal rates for the lower tax brackets and proposes to eliminate the federal income tax on seniors with incomes below $50,000. He suggests a universal mortgage credit of 10 percent, up to $800, a $4,000 refundable education credit, and expanding the existing Savers Credit to more taxpayers and making it refundable. He also proposes an expanded earned income tax credit (EITC), an expanded Child and Dependent Care Credit by making it refundable, and an expanded tax credit for clean vehicles. To pay for these tax breaks, he proposes restoring the 36- and 39.6-percent tax brackets, raising the capital gains and dividend tax rate to 20 percent for families with incomes over $250,000 ($200,000 for individuals) and restoring the phase-out for itemized deductions and exemptions. He also supports simplified tax returns for many filers and would also extend and index the increase in AMT exemption amounts.
McCain wants to make the Bush tax cuts permanent, including the lower marginal rates and capital gains and dividend rates. He also proposes gradually doubling the personal exemption amount to $7,000. He would pay for these proposals by eliminating congressional earmarks and with unidentified cuts in government spending. He has proposed simplified tax returns for many filers. He would also extend and index the increased AMT exemption amounts and has proposed an election for a separate and simplified alternative tax system.
Business Income Taxes
Obama generally supports corporate tax reform and hints of corporate tax rate reductions for domestic business activity tied to repealing other business tax breaks and closing loopholes to pay for the rate reductions. He also proposes to eliminate capital gains taxes on small businesses. Loopholes Obama has identified include clarifying the economic substance doctrine, increasing capital gains reporting, eliminating special tax breaks for oil and gas companies while expanding the renewable production tax credit, taxing carried interests as ordinary income, and what is described as the CEO pay loophole. He would also reform international tax loopholes and crack down on international tax havens. Further, he proposes making the research and development credit permanent.
McCain has proposed reducing the corporate tax rate from 35 percent to 25 percent, banning taxes on internet sales and cell phones, and permitting full first-year expensing for capital acquisitions. These tax breaks would be paid for with spending cuts or corporate loophole closers, identifying some of the tax breaks for oil and gas companies and repealing the domestic production activities deduction. McCain has also proposed expanding the research and development credit and making it permanent.
Obama would preserve the estate tax as in effect in 2009: a 45-percent top tax rate and a $3.5 million exemption.
McCain wants to preserve the estate tax with a 15-percent top tax rate and a $5 million exemption.
Obama would preserve the existing Social Security structure but help cover the growing deficit by imposing a payroll tax of four percent (two percent each from employer and employee) on incomes over $250,000.
McCain has proposed adopting personal accounts for younger employees, similar to proposals by the Bush administration.
Obama proposes targeted health care tax credits including a health care credit for small business. He proposes a new health insurance exchange to provide health insurance, paid for by employers who do not provide employee health insurance.
McCain wants a refundable tax credit of up to $5,000 for families to be paid for by treating employer-provided health benefits as taxable compensation to the employee.
By Jeff Carlson and Stephen K. Cooper, CCH News Staff