All Americans deserve a fair shot at economic equality, says Obama

Barack Obama today promised a "fair shot" for everyone as he drew clear battle lines with the Republicans.

The President used his State of the Union speech to set out the themes of his re-election campaign after months of being overshadowed by the race for the Republican nomination.

But the Republicans were quick to attack Mr Obama's pledge, claiming his actions were divisive and "pro-poverty".

Millions of Americans watched the annual political set-piece live on television as Mr Obama spoke to a joint session of Congress and set out his achievements but, more importantly in election year, his plans for a second term.

He said the state of the union "is getting stronger" and remained buoyant over the economic recovery. But he added that there was a great "economic inequality" in America and restoring social mobility was "the defining issue of our time".

"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," Mr Obama said. "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."

His message about income inequality was timed to coincide with Republican candidate Mitt Romney's release of his federal tax returns yesterday. He revealed that he earned nearly $22 million in 2010 and paid tax at about 14 per cent, largely because his wealth came from investments, which are taxed at a lower rate. Mr Obama called for a new minimum tax rate of at least 30 per cent on anyone making more than $1 million a year.

Indiana Governor Mitch Daniels, who gave the formal Republican response, said: "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."

Although domestic issues dominated his speech, the president flagged up extending new ties and influence toward Asia, while claiming that old alliances in Europe and elsewhere were stronger than ever.

He also called for the creation of a new trade enforcement unit that would tackle unfair trade practices around the world. The president said the US would provide financing to put its companies on an even footing when China or others use unfair export financing to help their businesses.

Polling shows Americans are divided about Mr Obama's overall job performance but dissatisfied with his handling of the economy.