Obama denies Republican claims of 'class warfare'

CEDAR RAPIDS, Iowa — US President Barack Obama Wednesday denied Republican claims he was waging class warfare as he set out to sell his call for tax hikes on the rich in states crucial to his reelection bid.

Hours after his combative and populist State of the Union address, Obama appeared first in Iowa, the cradle of his 2008 campaign, and was also due to appear in Arizona, Nevada, Colorado and Michigan in the next three days.

Obama hopes to convince voters that his vision of a remodeled economy, where everybody, not just the wealthy, gets "a fair shot" merits handing him a second White House term in November's election.

He argued Tuesday that those who earn a million dollars a year should pay at least 30 percent in taxes, decrying loopholes which offer rich Americans, like his possible Republican foe Mitt Romney, a much lower rate on investment income.

"I hear a lot of folks running around calling this class warfare," Obama said at a factory in Iowa, the state where he built the grass roots election campaign in 2008 that swept him to the White House.

"This is not class warfare," Obama said, citing legendary financier Warren Buffett's argument that he should pay a higher tax rate on his vast fortune than his own staff pay on their annual income.

"Asking a billionaire to pay at least as much as his secretary is common sense," Obama said, warning Americans must decide whether to build an equitable economy, fund education and the military or let the rich evade fair taxes.

"We cannot do both. You have got to choose," Obama said, hammering out his core election message while seeking to defuse Republican claims he is vilifying the rich in a bid to mine envy over their success.

"We don't begrudge success in America. We aspire to it," Obama said, speaking in front of a banner that read "An America built to last."

Previous attempts by Obama to raise taxes on the rich, or to rescind tax cuts on higher earners passed by former president George W. Bush have failed.

So his strategy appears as much an election gambit to portray Republicans as obstructive stooges of the rich at a time of deep income inequality as a genuine hope he can reform the tax code this year.

Republicans responded angrily to Obama's State of the Union message.

"I think it was a great campaign speech, obviously stoking the class warfare issue," Republican Senator John McCain, who lost to Obama in the 2008 election, told CNN Wednesday.

House Speaker John Boehner also faulted Obama's speech, signaling that many of the president's ideas for job creation and to boost education and manufacturing would likely go nowhere.

"Last night was just another campaign speech," Boehner said on the Laura Ingraham radio show.

"He wants to take no responsibility for his policies that have failed and made no reference last night to really stepping into the game and legislating."

In a new advertisement, 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," Romney said.

Obama will move on from Iowa Tuesday to Arizona and Nevada in the west, and visit Colorado and Michigan before he returns to Washington on Friday.

All five states, or a combination of several of the battlegrounds, could help provide a pathway for Obama to secure a second White House term, despite his approval ratings of below 50 percent and a tough economic environment.

While the president's trip will have a strong political undercurrent, his events are intended to convey to voters he is serious about specific measures in the speech, including a boost to manufacturing and worker retraining.

On Thursday, in Las Vegas, Nevada, Obama will make remarks at the premises of UPS, the multi-billion dollar delivery and distribution corporation, which is often one of the first firms to sense ups or downs in economic conditions.

On Friday, Obama will visit the University of Michigan, and is likely to highlight his plans to boost education and create a 21st Century workforce and to hail his rescue of the iconic US auto industry.

Romney on Tuesday reported income of $21.7 million in 2010 from investments and an estimated $20.9 million in 2011 -- and in 2010 paid just over $3 million in taxes, or 13.9 percent.