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President Barack Obama can claim credit for bringing the US economy back from the edge of catastrophe.
But on Tuesday he turned his focus to a glaring failure of the recovery - while the wealthy are now wealthier than ever, the average American has not seen any rebound in his wages since the 2008 crisis.
In his annual State of the Union address, Obama vowed to take on rising income equality; two months after frustrated voters dealt his Democratic Party a resounding defeat in Congressional elections.
Watch: Obama discusses the economy, Islamic militants and Cuba in State of Union speech

Obama called for higher taxes on the very rich, more tax breaks for middle-class families, an increase in the minimum wage and better workplace benefits to strengthen household incomes.
Touting a new "middle-class economics for the 21st century", he demanded: "Will we accept an economy where only a few of us do spectacularly well, or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes the effort?"
The issue has long been on the boil. The rebound from the 2008 to 2009 recession has put the US at the forefront of all major economies.

Last year job creation was the strongest since 1999, and the unemployment rate fell to 5.6 per cent - enviable within the G20 group of leading economies. And yet tens of millions of Americans still need soup kitchens and social handouts to survive.
Workers in fast food chains and huge retailers like Walmart are increasingly taking to the streets to protest bottom-level pay that forces them to work two jobs to make ends meet. In constant dollars the average hourly salary today is barely higher than that of 1964.
Meanwhile, the ultra-rich have steadily accumulated wealth. At the end of the 1970s, the top 0.1 per cent of Americans controlled seven per cent of the country's wealth. Today they control 22 per cent.
The racial divide is equally stark. White families are on average 14 to 15 times wealthier than blacks and Latinos.

"The fruits of the economic recovery unreasonably go to the very rich in the United States," said economist Justin Wolfers of Peterson Institute for International Economics. It "is not just the poor getting clobbered; it's the very rich doing extremely well."
Economists say that the low jobless rate hides the fact that millions of working age Americans have given up seeking jobs, and won't return unless they can get higher pay. Until they do, there will not be the tight supply of workers needed to force wages up.
"Unemployment is definitely lower now, but that's largely a part of the fact that a lot of people have left the labour force," said economist Ben Zipperer of the Washington Centre for Equitable Growth.

Aside from raising the minimum wage, Obama's proposals focused on tax changes that will shift benefits from the wealthy to the middle class and poor, and remove loopholes that mean the country's billionaires often pay a lower tax rate than their clerical staff.
His proposals pay for themselves fiscally, rather than adding to the deficit, a crucial issue for Republicans.
But Zipperer said this limitation was a "serious weakness", not increasing the budget to invest in things like roads, bridges and trains that will create more jobs and strengthen the economy. But it was more than likely that the Republicans, now in control of both houses of Congress, will turn most of Obama's proposals back.
They have repeatedly rejected any tax increases for the wealthy, and, tapping into a deep American cultural sensitivity, accuse the White House of fomenting class warfare.


	Read More: Full text of President Obama's speech
 


	State of Union address highlights
Tax hikes: Raise the top capital gains rate on couples with incomes above US$500,000 to 28 per cent. Impose a fee on roughly 100 massive financial firms with assets exceeding US$50 billion. Eliminate a tax break on inheritances. This would generate an estimated US$320 billion over a decade.
Tax breaks: Create a US$500 tax credit for families where both spouses work and have an annual income up to US$210,000. Expand the child care credit to up to US$3,000 per child under age five.
Education: Offer two years of free community college. Students would need to go to school at least half-time, maintain a 2.5 grade point average and make progress towards a degree.
Paid leave: Call for federal and local laws allowing workers to earn up to a week of paid sick time a year.
Retirement savings: Boost retirement savings by automatically enrolling people without access to a workplace retirement plan in an Individual Retirement Account.
Middle East: Urge Congress to pass a new authorisation for use of military force against Islamic State and militant extremists in the Mideast. Obama has been relying on 9/11-era war powers.
Trade: Ask Congress for so-called "fast track" trade promotion authority to allow an up-or-down vote on trade pacts. Obama wants to secure two major trade agreements - one with the EU, and one with Asia-Pacific nations.
Cybersecurity: Call for legislation enabling information-sharing between the private sector and agencies like the Homeland Security Department.
Associated Press


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Barack Obama

Time to ‘turn the page’ and help middle class, Obama says in State of Union speech

US President Barack Obama delivers his State of the Union speech to a joint session of the Congress on Capitol Hill in Washington. Photo: Reuters

Members of Congress applaud the president as he delivers his speech. Photo: AFP

Alan Gross, the US contractor released from prison in Cuba last month, is applauded during the State of the Union address. Photo: AFP 

Obama receives a standing ovation as he begins to deliver his speech. Photo: Reuters

First Lady Michelle Obama high-fives students during a sports  event. The president Obama plans tax increases to pay for  better education. Photo: AFP

Members of Congress applaud the president as he delivers his speech. 

Obama put on a defiant show in front of Rupublican-controlled congress

Barack Obama gestures during his annual address in front of the first fully Republican-controlled Congress of his presidency. Photo: AFP

A stern looking Obama points as he argues his policies had made the country stronger. Photo: AFP

'Pencil' tribute to Paris attack victims by US lawmakers

Yellow pencil tribute. Photo: AFP

Yellow pencil tribute.Photo: AFP

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World

In his annual State of the Union address, the US president vowed to tackle rising income inequality with higher taxes on the very rich


President Barack Obama challenged the Republican-led Congress to break out of the 'tired old patterns' of confrontational politics and back an effort to lift the middle class.


.css-sioo19{color:#c79a00;}Update | Time to ‘turn the page’ and help middle class, Obama says in State of Union speech

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}In his annual State of the Union address, the US president vowed to tackle rising income inequality with higher taxes on the very rich

Update | Time to ‘turn the page’ and help middle class, Obama says in State of Union speech

In his annual State of the Union address, the US president vowed to tackle rising income inequality with higher taxes on the very rich