United States President Barack Obama is set to deliver his State of the Union address where he explains his proposal to close multibillion dollar tax loopholes and use the revenue to benefit the middle class on Tuesday.

His proposing reinforces his theme of income equality.

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Obama looks to close multibillion dollar tax loopholes used by a significant portion of wealthy Americans. He plans to impose fees on these big financial firms to gain revenue from the middle class.

While the proposal is controversial, the administration is hopeful that they can cultivate a bipartisan support in the Republican-dominated House of Representatives and Senate.

The proposal will spark some embers for Republicans due to the fact that the administrations seeks to increase taxes.

During a conference call with reporters, one official said that the taxation concept in Obama's plan already sustains bipartisan support, as the idea itself is bipartisan in nature.

The proposal calls for reforming the tax rules that are currently used for trust funds. The administration identifies these funds as "the single largest capital gains tax loophole" since it allows assets to be passed down to heirs of the American rich.

All the while, these assets are not taxed.

The proposal would also raise capital gains and dividends to 28 percent.

Taking precautions against managing financial risk that could threaten the country's economy, Obama has also set up several points on the liabilities of U.S. financial firms with assets valued over US$50 billion. This makes it harder for these companies to borrow a lot of money.

The proposal is projected to gain US$320 billion over a time period of 10 years. The revenue across this time would be used to pay for benefits Obama wants for the middle class.

The benefits include a $500 credit for families with two working spouses, a tripled tax credit for child care to US$3,000 a child, and some education tax incentives, to name a few.

Tagstax loophole, Barack Obama, State of the Union, middle class, income equality