IT seems as if all the U.S. tax talk I've talked about this past year has been about either FATCA or F(u)BAR. Yes, I do not deny my ranting and raving about the new, invasive U.S. tax programs. That, though, is not all there is to U.S. tax talk. There is a national election coming to the States this November and at current, there one incumbent and 4 aspirants hoping to unseat the incumbent, President Obama.

Taxation and tax policy is an integral part of the economy and the economy IS going to be THE issue. Do I think there will be other aspirants for the job? Quite possibly - because the primary challenger, Mitt Romney, is as lackluster a candidate if there ever was one - frankly, while I think he is the most electable of the 4 Republican aspirants, he is, perhaps, most removed from the grass roots, tea party Republicans who seem to be able to get out the vote well in excess of what you'd expect them to - not enough, perhaps, to sway a national election but definitely enough to impact state elections and local Congressional seats are, in essence, locals elected to national office. It could very well be that Obama, a Democrat, is elected and the Democrats retain control of the Senate but that the status quo, with a Republican controlled House of Representatives is the November election result. What happens then for a country desperately in need of tax reform? Will there be tax change? If that is the election result, then I think there is as little likelihood for U.S. tax change as there is likelihood for a DTC in India, next year ... in other words, no chance, whatsoever!

But just perchance, let us say that there is either a Democrat sweep (which is more likely to be the result, if the election were held today) than a Republican sweep. Or that regardless of the outcome, the only thing, for sure, is that there is a sweep by one party. Then it would be worthwhile to look at the five candidates and their tax policy suggestions.

Let us look at five areas: individual income taxes, deductions and/or exemptions, capital gains and dividends, corporation income taxes and estate taxes and see how the five candidates compare:

Individual Income Tax rates

BARACK OBAMA: Maintain current tax rates (with a maximum of 35 percent) but increase that rate to 39.6 percent for households with income over $US250,000.

MITT ROMNEY: Cut current individual income tax rates by 20 percent, with the maximum rate set at 28 percent.

RON PAUL: Maintain the current system and tax rates until a flat tax can be enacted. Here I have to inject some editorial comment: with lobbyists (and their money) so influential in the U.S., I think it will be easier for India to enact a DTC than for a flat tax to come to the U.S. - at least in our lifetime!

NEWT GINGRICH: Here it is interesting, as Gingrich would allow individuals the choice between following the current system of rates with deductions and exemptions or opting for a 15 percent flat tax. How are you going to pull that one off?

RICK SANTORUM: Create a two bracket system - the low bracket at 10 percent the high bracket at 28 percent.

I have one question for each of these five gentlemen: If current U.S. law stipulates that any changes to taxation be 'revenue neutral', how are you going to cut taxes without violating current U.S. tax law?

Deductions and exemptions:

BARACK OBAMA: The President would start eliminating deductions and exemptions for households with more than $US250,000 of income, entirely eliminating deductions for those with incomes above $US1 million.

MITT ROMNEY: This sounds pretty much like Obama - limiting the value of deductions for upper-income households in order to cover the costs of cutting tax rates. At least, here, we have someone who recognizes the revenue neutral laws on the books.

RON PAUL: Here's a man who doesn't say much. In fact, in this particular area, he's said absolutely nothing - no one truly has any idea where he stands on this aspect of things.

NEWT GINGRICH: Something different - Gingrich would keep deductions for charitable donations and home mortgage interest (I wonder how much the banking industry has contributed towards his campaign?) and then, as his frosting to the deduction cake, give all a $US12,000 personal deduction.

RICK SANTORUM: Santorum's policy is 'simple' - but then, I view him as a simpleton - he'd triple the tax credit for families with children.

Capital gains and dividends (the current rate for qualified dividends and long-term capital gains is 15 percent)

BARACK OBAMA: Increase the top rate for capital gains to 20 percent and tax dividends as ordinary income for $US250,000 and above household income earners.

MITT ROMNEY: Once again, there is much similarity here between Romney and Obama (which is probably why the tea party Republicans do not trust him) - Romney would not tax capital gains or dividends for households with income under $US200,000. For the households which would be taxable, current rates would stay the same.

RON PAUL AND NEWT GINGRICH: They'd both eliminate all capital gains and dividend taxes.

RICK SANTORUM: He'd lower the top rate for both capital gains and dividends to 12 percent.

Corporate income tax rates (the current rate is 35 percent)

BARACK OBAMA: He'd lower the rate to 25 percent for manufacturers and 28 percent for all other corporations.

MITT ROMNEY: He'd drop the rate to 25 percent for all corporations.

RON PAUL: He'd drop to 15 percent.

NEWT GINGRICH: He'd drop it to 12.5 percent.

RICK SANTORUM: Ah some differentiation here - no corporation tax for manufacturers while a 17.5 rate for all others.

Estate tax rates (currently estates with value over $500,000 are taxed at the maximum rate of 35 percent)

BARACK OBAMA: Go back to the levels prior to 2009 (we'll explain a bit later, when I bring up the gift tax.....) where a maximum tax rate of 45 percent was assessed upon inheritances of more than $US3.5 million.

EVERYONE ELSE: Abolish the tax!

Wow - we've finally found a real division of thought here - and perhaps the only area where the four Republicans (I personally like to call them the four dwarfs) are united.....And that leads me to a discussion for those of you, out there, who either are considered 'wealthy' or who have clients who are considered 'wealthy' AND are U.S. tax filers. To put it bluntly, there is a U.S. $ 5 million dollar gift tax exclusion this year. It expires at the end of 2012 and goes back to the U.S. $ 1 million exclusion next year. For those in this area - and I assume there are many, many NRIs who would fall into this category, this, my friends, is the year to give!!!!! Get it out of your hands before it becomes taxable, again!

So you say: Yeah, I'm supposedly wealthy but it's all tied up - I don't have cash - its all in the business. And yes, that is true - you might have a long time business in India with a build up, over the years, in retained earnings. You, as a U.S. tax filer (citizen or green card holder) have dutifully reported your ownership through Form 5471, U.S. persons ownership of a foreign corporation. You kept the money in the corporation and legitimately avoided paying higher U.S. taxes and you have a multi-million dollar retained earnings build up. Yeah, you are still involved in the business but it's the kids who are running it now. Give it to the kids - at least on paper - otherwise, if you unexpectedly die next year or the year after, you'll die another death when you see what the tax on your business will be!

This is a very legal maneuver to reduce either the size of your estate, for U.S. estate tax purposes or for reducing that total of net assets on Form 8854 if you are considering expatriation from the U.S. Treasury Secretary Timothy Geithner said, a day or two ago, in a speech supporting the reversion of the estate tax rates to those prior to 2009 that it was the price for the privilege of being an American. Somehow, I think there are an awful lot of Americans who would seriously dispute both Mr. Geithner's ideas and attitude. There are an increasingly large amount of U.S. citizens who came to the the U.S. in the 70s (The Emergency was a very big reason for this this!). They raised their families and then came home. They are proud to have been part of the golden age of American immigration from Asia yet they are increasingly concerned about the costs they still have to pay for the 'privilege'.