CNN: Remember all the talk during the presidential campaign about a middle-class tax cut? It could be showing up in your paycheck early next year.
As the debate heats up over how to pull the economy from the ledge, it's likely that tax cuts for the middle-class will play a central role.
President-elect Barack Obama hopes to have a massive economic stimulus plan waiting for his signature when he takes office on Jan. 20. It's expected to include hundreds of billions in spending on infrastructure and green energy, but he also made clear last week that he wants it to also feature tax cuts to lower- and middle-income Americans.
Tax cuts are "part and parcel of what we need when it comes to stimulus," Obama said last week.
"We're going to be putting money in people's pockets so that they can spend on buying a new computer for their kid's school, so that they can, you know, make sure that they are able to deal with heat and groceries and all the other strains on the family budget," he added.
But Obama may hold off on reversing Bush's tax cuts:
One promise he made but may hold off on for awhile: the reversal of some of the Bush tax cuts for high-income taxpayers, who are roughly defined as individuals making more than $200,000 and couples making more than $250,000. Specifically, Obama has said he would increase the top two income tax rates and the capital gains rate to their pre-2001 levels.What might the tax cuts look like?
So what kind of tax cuts are being considered? Obama's transition team isn't offering details yet and one Democratic aide on the Hill told CNNMoney.com that specifics have not yet been discussed.
But in talking about his economic recovery package, Obama has mentioned his campaign promise to offer a "net tax cut" for "95% of American workers."
One option that could get Obama a good way toward that 95% is his proposed Making Work Pay credit -- a centerpiece promise in his campaign. The credit would essentially work as a payroll tax credit equal to $500 for individuals and $1,000 for couples.
