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  • U.S. President Barack Obama

    U.S. President Barack Obama | Photo: Reuters

The U.S. president will appeal to lawmakers during his State of the Union address.

Obama's plan would increase taxes on the wealthiest taxpayers and the richest financial corporations, and cut taxes on the middle class.

According to official estimates, the plan could raise US$320 billion over the next decade, while adding new provisions cutting taxes by US$175 billion over the same period.

The new revenues would be used for a series of government programs that President Obama spoke about in recent weeks, aimed at helping the middle class.

For instance, an educational fund that would give students up to US$2,500 annually to earn a college degree, or tripling the child care tax credit to help middle income families with up to US$3,000 for each child under age five.

The proposal is likely to receive mixed reactions by the Republican majority in Congress, as both parties have discussed a potential business tax reform, but have failed to agree on individual taxation.

The details of the proposal are yet to be known but officials say the plan is set to close the “hedge-fund loophole” and is designed to make “risky activity” more costly for big companies with over US$50 billion assets.

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