Democratic presidential contender Barack Obama proposed up to $85 billion in tax cuts for about 150 million Americans on Tuesday, paid for by raising capital gains and dividend taxes on wealthy investors.
Obama's tax plan, set to be announced in a speech in Washington, includes a cut of up to $1,000 for working families, a mortgage interest credit for low- and middle-income homeowners and the elimination of income taxes for seniors making less than $50,000 per year.
"To get through these uncertain times, we have to recognize that we all have a stake in one another's success," the Illinois senator said in excerpts of the speech provided by his campaign. "When folks are hurting out there on Main Street, that's not good for Wall Street."
Obama is playing catch-up in the 2008 presidential race behind Democratic front-runner Sen. Hillary Clinton of New York, who leads national polls less than four months before the first nominating contest in Iowa.
His focus on taxes comes the day after Clinton unveiled her plan for universal health care as the contenders in the November 2008 presidential election stake out their policy positions.
Obama said he would pay for the middle-class tax relief with a crackdown on corporate loopholes and offshore tax havens and an increase in the highest bracket for capital gains and dividend taxes. He did not specify the size of the increase.
His proposal also would simplify the process of filing taxes so Americans could do their taxes in less than five minutes, he said.
Obama said he would give an income tax cut of $500 per person -- or $1,000 per working family -- to 150 million Americans. Because the cut would be greater than the income tax bill for some, he said, it would eliminate taxes for 10 million working Americans.
The homeowners' tax credit would benefit about 10 million home owners, he said, and the tax breaks for seniors would eliminate income taxes for about 7 million Americans.