Presidential hopefuls Barack Obama and John McCain have clashed over the issue of tax reform.

Obama has pledged to introduce a windfall profit tax on oil companies and raise income tax for those earning over $250,000 a year if he wins the White House. McCain favors a lower corporate tax rate (from 35% to 25%) and suspension of fuel taxes during summer. Both seek tax cuts for the middle class.

“Investors should focus their minds around one uncomfortable fact,” says Martin Hutchinson in Money Morning.

As Barack Obama closes in on the Democratic presidential nomination, investors should focus their minds around one uncomfortable fact: Whether it’s Obama or Republican John McCain who wins the White House, expect some policy changes that won’t sit well with investors – or with the U.S. economy.

It may not seem likely now, but GOP strategists believe 71-year-old Republican presidential candidate John McCain could beat Barack Obama in the presidential race — and by a margin exceeding President Bush’s Electoral College victory in 2004. This from Politico.com:

At first blush, McCain’s recent rough patch and the considerable financial disadvantage confronting him make such predictions seem absurd. Indeed, as Republicans experience their worst days since Watergate, those same GOP strategists are reticent to publicly tout the prospect of a sizable McCain victory for fear of looking foolish.

A report in the right-wing Israeli newspaper The Jerusalem Post claims that President Bush intends to attack Iran in the upcoming months, before the end of his term.

The move would play further havoc with oil prices, and could send the price of oil spiraling to $200 and beyond.

Iran claims to have the world’s third largest reserves of oil at approximately 136 billion barrels as of 2007. The country ranks second if Canadian reserves of non-conventional oil are excluded.

As high prices at the pumps and the rise of biofuels cut into demand for gasoline, US oil refiners are switching their attention to diesel.

“The trend that is important behind the story of the future expansions is the downtrend in gasoline,” said Joanne Shore, analyst for the U.S. Energy Information Administration, speaking to Thomson Reuters.

“We feel that demand for distillates is going to be higher than gasoline for the next several years.

When ethanol comes out of the plant, the first thing they do is add a few drops of gasoline. This has nothing to do with performance or transport… It’s simply to poison the ethanol so people won’t drink it.

You know the old saying about teaching a man to fish, as opposed to just giving him a fish. Well, the state of the US Social Security system has led me to propose to you a new version of the fish proverb: “Give a man a fish and you feed him for a day, teach a politician to fish and he’ll steal your pole”.

Intrade is a website that allows you to bet on the outcomes on a variety of international events, from political elections and finance, to “Will Elliot Spitzer be Indicted on Felony Charges on or before June 30th”.

The traders on the website are currently betting with 89% odds that Barack Obama will be the Democratic nominee. They’re also placing a 37.9% chance that John McCain will win the presidential election in November. And, the chances of the US going into a recession in 2008 have fallen to 28% from a high of 76% back in early April.

The war between the ‘flations drags on. Inflation has become globalized. In the United States, you are on the pot-holed highway to Hell…and more thoughts, insights and advice to take you into the weekend!

Lost in the meaningless bickering among the presidential candidates over suspending the federal gasoline tax is some genuine news…