By Sky News US Team
President Barack Obama has said it is time for the US to "turn the page" on years of hardship, as he urged Republicans to back tax increases on the rich to help struggling American families.
In his annual State of the Union speech to Congress, a bullish Mr Obama also called on lawmakers to pass a new authorisation of military force against Islamic State militants.
He said the US-led effort to stop the extremists from advancing in Iraq and Syria is working without sucking the US into another Middle East ground war.
The Democratic president said that in the last decade and a half the US had been touched by terror, two long wars and a "vicious recession".
"It has been, and still is, a hard time for many," he said. "But tonight, we turn the page."
The President wants to increase the capital gains tax rate on couples making more than $500,000 (£330,000) per year from 23.8% to 28%, the same level as under President Ronald Reagan.
The top rate has already been raised from 15% during Mr Obama's presidency.
He said: "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?"
Winking at the chamber, he added: "So the verdict is clear. Middle-class economics works. Expanding opportunity works.
"And these policies will continue to work, as long as politics don't get in the way."
The Republicans promptly issued their rebuttal.
New Iowa Senator Joni Ernst said: "Americans have been hurting, but when we demanded solutions, too often Washington responded with the same stale mindset that led to failed policies like Obamacare.
"It's a mindset that gave us political talking points, not serious solutions."
Republicans will not pass the new tax increases, but Mr Obama will place them in the difficult position of blocking measures that could offer a lift to the middle class.
The issue of income inequality is likely to be a defining one as Republicans and Democrats vie to replace Mr Obama in the 2016 White House election.
During his Tuesday night speech, Mr Obama also defended his move to end the US embargo against Cuba.
Alan Gross, the US aid worker whose release from detention by the communist-ruled island helped pave the way toward restoring diplomatic ties, was among Michelle Obama's guests for the speech.
He punched the air and said to the President: "Thank you!"
Using a sporting analogy, Mr Obama recently pledged to "play offence" in the last two years of his presidency.
He has already used executive actions to thwart Republicans, who in November's midterm elections took control of both houses of Congress for the first time since he came to office.
Six years after Mr Obama came to power during the Great Recession, US unemployment is at 5.6%, the stock market is at near record levels, growth is surging and petrol prices have plummeted.
A recent ABC/Washington Post poll saw Mr Obama's approval rating soar nine points to 50%.
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