(By Salman - iStockAnalyst Writer)President-elect Barack Obama is expected to include a massive $300 billion in tax cuts for middle class and business in his $775 billon stimulus plan meant to rescue US economy from a deepening recession.

“We're working with Congress to develop a tax-cut package based on a simple principle: What will have the biggest and most immediate impact on creating private-sector jobs and strengthening the middle class?" transition-team spokeswoman Stephanie Cutter said in a statement.

According to democrat aides and advisors under Obama's proposal, about 40% of economic rescue package would be in the form of tax breaks. The economic stimulus bill, according to Obama aides may include tax cuts of $500 to $1,000 for middle-class individuals and couples. The package is also expected to include more than $100 billion in tax credits for businesses to encourage job creation and expansion of their operations. Additionally, accelerated depreciation is likely to be proposed to encourage business spending by companies which have been forced to defer their capital expenditure. It is being contended that a large tax break is being accommodated in the economic stimulus bill to win Republican approval.
 
It appears that the latest move is yielding results. Senate Republican Leader Mitch McConnell of Kentucky said Sunday, that his party would support an immediate middle-class tax cut as part of any stimulus package. “Republicans, by and large, think tax relief is a great way to get money to people immediately,” McConnell said on ABC’s “This Week.”

Fed officials too came out in support of economic stimulus. In an annual meeting of the American Economics Association on Sunday, San Francisco Fed President Janet Yellen said "The financial and economic firestorm we face today poses a serious risk of an extended period of stagnation -- a very grim outcome. I'm strongly supportive of a substantial fiscal stimulus package. If ever, in my professional career, there was a time for active, discretionary fiscal stimulus, it is now."

Meanwhile, according to a transition team aide, Obama does not have a timetable to develop and pass an economic stimulus package and the Jan. 20 goal for enactment of the plan seems "very, very unlikely."

"We don't anticipate that Congress will have passed, both houses, an economic recovery agreement by the time the Inauguration takes place," he said. "We're going to get it done as quickly as we can," Senate Majority Leader Harry Reid said recently.

“It’s going to be very difficult to get the package put together that early so that it can have sufficient time to be reviewed, and then sufficient time to be debated and passed,” added House Majority Leader Steny H. Hoyer, a Southern Maryland Democrat. “We certainly want to see this package passed through the House of Representatives no later than the end of this month, get it over to the Senate, and have it to the president before we break for the presidential break,” Mr. Hoyer concluded.