Obama proposes middle-class tax cuts

Sen. Barack Obama (D-Ill.) on Tuesday unveiled a plan that he says would give middle-class Americans a “substantial” tax break.

{mosads}Obama, who trails Sen. Hillary Rodham Clinton (N.Y.) in the race for the Democratic presidential nomination, wants to simplify the tax filing process and touted his plan as allowing Americans to do their taxes in “less than five minutes.”

“Instead of working to find ways to relieve the burden on the middle class, we’ve developed creative ways to remove the burden from the well-off,” Obama said during a speech in Washington. “Instead of having all of us pay our fair share, we’ve got over $1 trillion worth of loopholes in the corporate tax code.”

The senator blamed special interests for putting in place a system of tax cuts that “favor wealth, not work” and that are “too complicated for ordinary folks to understand, but just complicated enough to work for someone who knows how to work the system.”

Obama proposed closing corporate tax loopholes and using the money to help working families.

“Every American who is ready to work for their American Dream should be able to trust that they have a government that works for them,” Obama said. “I’ll keep that trust by cutting taxes for working people, homeowners and seniors, and by simplifying tax filing for middle-class Americans.”

The senator added that he would “reward work” by giving workers a $500 income-tax cut. This, Obama claimed, would eliminate the income tax for 10 million Americans. In addition, he proposed a “universal homeowners’ tax credit” that would put additional money back in the pockets of taxpayers.

To make filing taxes easier, Obama said under his administration, the IRS would send a pre-filled tax form to Americans who take the standard deduction, and have a job and a bank account.

“Making this change would save Americans more than $2 billion in tax-preparer fees, more than 200 million hours of work and an incalculable amount of headache and heartburn,” Obama said.