Obama's Middle Class Tax Credits: What Do They Mean for You?

The president is "just picking out one particular group and saying, 'We're going to bestow on you a special benefit' " he said. "The rest of the country might like that particular benefit in the form of tax relief."

More Proposed Initiatives

Other proposals by the Task Force on the Middle Class include:

Automatic IRAs: Employers who do not offer retirement plans to their workers would be required to set up individual retirement accounts that would automatically devote a certain percentage of a worker's salary to a retirement plan. Workers could opt out of the plan. Very small companies would be exempt from the requirement. A tax credit would help defray the administrative costs of the IRAs, according to the administration's proposal.

More Transparent 401(k) Plans: The administration says this proposal would improve transparency related to 401(k) retirement plan fees, encourage plan sponsors to provide workers with investment advice, promote annuities and other guaranteed lifetime income options and require clear disclosures related to target-date funds, which adjust workers' investments as they near retirement age.

More Funding for Programs to Care for the Elderly: The administration's Caregiver Initiative would provide $52.5 million to the Department of Health and Human Services for caregiver support programs -- including counseling and training -- as well as $50 million for programs that provide transportation, adult day-care and in-home services related to the elderly.

Some say they're not terribly impressed by any of the proposals thus far -- what they'd really like to find out, they say, is whether Obama will extend tax cuts passed during the Bush era or whether the president will allow them to expire. Under Bush's tax cuts, the highest marginal tax rate dropped from 39.6 percent to 35 percent, while the fourth-highest tax rate, 28 percent, dropped to 25 percent.

"What we're most interested in hearing, we haven't heard -- is it true the rumor that the Bush tax cuts might be extended an extra year?" said Bill Ahern, a spokesman for the conservative Tax Foundation. "There's been no hint on that and since many of the Bush tax cuts are middle-class tax cuts, that's the thing that we're looking to finding out."

The president did offer at least one clue about his tax plans in an exclusive interview Monday with ABC's "World News."

Asked if he could guarantee that there would not be a tax increase for anyone making less than $250,000, Obama said, "I can guarantee that the worst thing we could do would be to raise taxes when the economy is still this weak."

The New Middle Class?

The proposals from the administration and the Task Force on the Middle Class -- led by vice president Joe Biden -- come as the definition of middle class seems to be evolving.

A new report from the U.S. Commerce Department's Economics and Statistics Administration argues that being a middle class family has more to do with a family's goals than its income. Those goals, according to the report, include home ownership, a car, college education for their children, health and retirement security and occasional family vacations.

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