TRADING GAME:

President Barack Obama will call on the new Republican-led Congress to raise taxes on investments and inherited property and to create or expand a range of tax breaks for middle-income families, laying out an opening position in a debate over taxation that both parties see as a potential area of compromise.

Obama will outline the measures in his State of the Union address Tuesday night. He will propose using revenue generated from the tax increases--which would fall mainly on high-income households--to pay for a raft of new breaks aimed at boosting stagnant incomes for low- and middle-income households.

Those initiatives include tripling the child-care tax credit and creating a new credit for families in which both spouses work, senior administration officials said on Saturday.

The administration plans to consolidate and expand education tax breaks. It would also make retirement savings programs available to many more people, for example by requiring many employers that don't currently offer workers a retirement plan to enroll them automatically in an individual retirement account. The administration says its proposals would make retirement saving programs available to 30 million additional people at the workplace.

Obama's address Tuesday will start the process of determining where he might find common ground with the new Republican Congress. Both the president and GOP leaders have said that a tax overhaul, along with trade, might yield compromises.

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