Obama to focus on middle class in State of Union address

Obama to focus on middle class in State of Union address

WASHINGTON (Reuters) - President Barack Obama will challenge the Republican-led Congress with tax-raising ideas for helping middle-class Americans in a State of the Union speech on Tuesday that will set up a tough debate and may impact the 2016 campaign to replace him.

Obama will push a plan in his speech to increase middle class benefits by hiking taxes by $320 billion over 10 years for the wealthy and financial firms.

Obama and Republicans had signaled after the November midterm election that they saw tax reform as a potential area for compromise. But Republicans who control of both houses of Congress are in no mood to raise taxes on anyone and were quick to pan Obama's proposal.

"This plan that we'll hear about tonight appears to be more about redistribution, with added complexity, and class warfare, directed at job-creating small businesses, than about tax reform," said Republican Senator Orrin Hatch, the Senate's top tax law writer, in a speech to the U.S. Chamber of Commerce.