If there’s an election that impacts the American people’s tax burden, the 2012 presidential election is it.

Republican candidate Mitt Romney and Democratic incumbent President Barack Obama are apples and oranges when it comes to most issues, and tax reform is certainly no exception. That’s why taking a look at both candidates’ plans is important for casting your ballot.

Election 2012: Romney and Obama Tax Plans

Obama

Under Obama’s plan, the tax cuts implemented under former President Bush would be extended for everyone except households making more than $250,000 a year, and individuals making more $200,000 a year. It would also increase the capital gains tax, and the dividend tax.

If you have a sizable stock portfolio, you’re likely to be impacted. But the essence of Obama’s plan is that it mostly impacts the wealthy. All in all, about two percent of the country’s population would see a tax hike.

Romney

Mitt Romney’s plan, predictably, takes a different view. The Bush tax cuts would be extended for everybody. This includes individuals making more than $200,000 and households making more than $250,000 annually. The biggest part of his plan is to decrease tax rates by 20 percent across the board and repeal the estate tax.

But to make up for the lost revenue, certain deductions would have to be sliced out of the tax code. Among those for the chopping block would be the earned income and childcare tax credits, and another tax credit for higher education.

Romney’s plan supports spurring investment by eliminating taxes on interest income, long-term capital gains, and dividend taxes for couples earning less than $200,000 a year.

So all in all, Obama’s plan leaves taxes for the middle class free of an increase. It increases taxes on those Romney wants to see investing in the private sector.

The Election Matters

Which plan makes sense for you or your family is up to you, but what doesn’t make sense is to skip out on paying your taxes altogether. A wage garnishment or bank levy may not increase the tax rate you pay, but the penalties and interest will certainly impact your wallet. That’s why working with a tax professional to get your taxes in order is key for your own financial plan.

Working with a tax professional may not help you become president. But it’ll help you become king or queen of your own financial domain.