Obama to push tax hike, trade deals in State of Union speech

(Reuters) - President Barack Obama aims in Tuesday night's State of the Union address to outline his plans to help middle class people left behind by the economic recovery through tax increases on the most wealthy and by signing trade deals to expand markets for American goods and services.

The idea of raising the top capital gains and dividends tax rate to 28 percent from 23.8 percent is popular with Democrats who are looking beyond Obama's tenure to the 2016 elections. But it seems dead on arrival with Republicans who control both houses of Congress.

For Obama, seeking to burnish his legacy with two years left in office, the speech will be his best opportunity of the year to talk to millions of Americans watching on television about the improvedeconomy six years into his tenure, which began with the Democrat facing a crippling financial crisis.

Obama has said he wants to reach out to Republicans who support trade deals with Asia and Europe that his administration has pursued, over the objections of some of his fellow Democrats. He could push for fast-track trade negotiating authority in his speech at 9 p.m. EST (0200 GMT  Wednesday).

"If President Obama can be more forward-leaning with members of his party, starting with tonight's State of the Union address, I think we can get this (fast-track authority) done quickly. That is what I am committed to do," said Republican Senator Orrin Hatch, chairman of the Senate Finance Committee, in a speech to the U.S. Chamber of Commerce.

Relations between Obama and Republicans have been off to a rocky start this year. Obama has threatened to veto seven bills so far as well as a proposal for tougher Iran sanctions.

Obama’s speech will allow the president to update Americans on the threat of Islamist extremists, two weeks after 17 people were killed in attacks in France.  Read More at State of Union speech