Tax Cut or Tax Hike? Understanding Obama's Plans

The majority of Americans won't fall into either of the two highest tax brackets but, experts say, they could see changes to their tax bills thanks to a host of other measures included in Obama's plan.

The administration's proposal includes expanding or extending several existing tax credits:

• The "Making Work Pay Credit," which could save 95 percent of American families an average of about $800 a year.

• The "American Opportunity Tax Credit," which could save families up to $2,500 per year for up to four years.

• The "Saver's Credit for Americans," which will match 50 percent of the first $1,000 of retirement savings for a typical family.

The administration's plan also includes almost $100 billion in tax cuts for businesses as well as proposals aimed to close loopholes, including $36 billion in tax breaks for oil companies and $86 billion from the "check the box" provision that allows multi-national US companies shift income to overseas tax havens.

The proposals take on "a series of unjustifiable loopholes and unjustifiable tax breaks that we simply cannot afford when trying to both pay for critical priorities and maintain fiscal responsibly going forward," a senior administration official said.

Whether the Obama administration's tax plans become law is, of course, up to Congress, where they face an uncertain future.

"Congress isn't happy about a number of things that are being proposed," Bob Williams said. "…The real question is how much of this is real?

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