JP Morgan had a report (Impact of Tax Rates on Stock Market Returns) how bad it is when you raise taxes. So Obama remaining in power should mean S&P 500 -7 to -14% and Romney +7 to +14%. [PV: history learns that when a democratic president is re-elected that lead to a rise of 20% of the S&P on average] The authors of JP Morgan doesn’t seem to be friends of Obama.
There are reasonably strong relations between higher taxes and more progressive taxing and bad equity returns according to JPM .
If you hike taxes on incomes and makes the system more progressive you could end up like the Netherlands: -5% each year for the S&P.
The returns of the Netherlands could have been worse when the Dutch didn’t had such a favourable treatment of taxes for business (chart below).
The results are not that convincing: one could say that the bad results are caused by geography: maybe the Euro crisis produces all the bad returns, not the tax system.
Still, the tax influence seems to be pretty big and then one could better invest in Chile and Poland