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Barack Obama delivers his State of the Union address -
Barack Obama greets Gabrielle Giffords before delivering his address
US President Barack Obama has called for a level playing pitch for all Americans, including tax hikes for millionaires, to finance a fair economy from "top to bottom".
His State of the Union address, which came ten months before seeking re-election, focused on the domestic agenda.
Mr Obama also called for tougher treatment of corporations that move jobs out of the US and tax credits to attract jobs back to the country.
Fairness was his theme as he tried to offer Republicans compromises that would bring America's wayward finances back to heel.
He suggested that whatever is saved from ending the overseas wars should be split equally between reducing the deficit and investing in education and health.
"We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by ... or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules," he said.
Mr Obama demanded millionaires pay at least 30% tax rates, tapping into public anger at low rates paid by the rich, including his possible Republican election opponent Mitt Romney.
Mr Romney yesterday reported income of $21.7m in 2010 from investments and an estimated $20.9m in 2011. In 2010, he paid just over $3m in taxes or 13.9%.
Mr Obama mounted a staunch defence of his efforts to revive the economy, which will form the central clash of the presidential election.
He touted the creation of more than 3m jobs in less than two years, said he had saved the US car industry and predicted American manufacturing, the engine of the economy, would rise again.
Foreign crises
Mr Obama also touched on several simmering foreign crises, including the escalating nuclear tension with Iran.
"Let there be no doubt. America is determined to prevent Iran from getting a nuclear weapon, and I will take no options off the table to achieve that goal," Mr Obama said.
"But a peaceful resolution of this issue is still possible, and far better, and if Iran changes course, and meets its obligations, it can rejoin the community of nations."
The US President hailed the killing of Osama bin Laden last year by a US special forces team in a raid in Pakistan and his promise kept to end the Iraq war as election year proof of his credentials as commander-in-chief.
He also hailed the demise of Libya's Muammar Gaddafi and warned Syria's Bashar al-Assad his regime's days were numbered.
Anyone who said US power was in decline did not know what they were talking about, he said, adding: "America remains the one indispensable nation in world affairs."
The president also pledged to keep up pressure on China over intellectual property piracy.
Republican Response
Republicans quickly savaged the speech.
In a new advertisement, Mitt Romney compared the hope whipped up by the president in 2008 to his actual job performance.
"Three years ago, we measured candidate Obama by his hopeful promises and his slogans. Today President Obama has amassed an actual record of debt, decline and disappointment," Mr Romney said.
Newt Gingrich complained that Mr Obama argued "that his big government is built to last and should be paid for with higher taxes.
"But bigger government and higher taxes will not lead to jobs and growth."
Mitch Daniels, the Indiana governor chosen to give the official Republican response to Mr Obama, accused the president of adopting divisive election year tactics.
"No feature of the Obama presidency has been sadder than its constant efforts to divide us, to curry favour with some Americans by castigating others," Mr Daniels said.
