Washington plans to institute a series of targeted tax cuts for companies and individuals as a way of jump-starting the economy, U.S. President Barack Obama said Wednesday in Cleveland.

The U.S. government will extend tax relief to companies that invest in new equipment and research and development in 2011, Obama told an audience in Cleveland.

"One of the keys to job creation is to encourage companies to invest more in the United States," he said.

The move will help small firms fund equipment upgrades and encourage larger companies to improve their operations, Obama said.

Help for people

Besides tax breaks for corporations and small businesses, the White House is proposing a series of measures to lower taxes for Americans. They are:

• Lowering some personal income tax rates.
• Improving the existing child tax credit.
• Making permanent the country's university tax credit.

"These families are the ones who saw their wages and incomes flatline over the last decade — you deserve a break. You deserve some help," Obama told a mostly partisan audience.

The major tax reduction Obama is proposing would continue measures introduced by former president George W. Bush and would see lower rates for any American earning less than $250,000 US.

Uphill fight for Democrats

Obama made the announcement as the Democratic Party is facing an uphill fight to retain control of Congress in the upcoming November elections.

Earlier this week, he proposed a $50-billion stimulus plan to build infrastructure across the United States.

Still, polls are predicting Obama's party will lose seats in the U.S. Senate and the House of Representatives in that vote.