President Barack Obama challenged the Republican-led Congress on Tuesday to break out of the "tired old patterns" of confrontational politics and back an effort to lift the middle class, with higher taxes on the rich and trade deals.

"Imagine if we did something different," Obama said in his annual State of the Union address. "A better politics is where we appeal to each other's basic decency instead of our basest fears."

Addressing Congress for the first time since Republicans seized the Senate in November elections, the Democratic president made clear he will not back down from his political opponents, urging them to work with him to engage in a debate about the future "without demonizing each other."

Many of the proposals outlined in Obama's televised address, while popular with many Americans, are unlikely to become reality, given Republican opposition.

Obama took credit for a hard-won rebirth in the U.S. economy, with a jobless rate down to 5.6 percent, and said it is now time to "turn the page" from recession and war.

On foreign policy, Obama defended his decision in December to seek to normalize relations with Cuba and urged Congress to lift the more than 50-year-old economic embargo against Havana.

He called on lawmakers to pass a new authorization of military force against Islamic State militants to replace powers that were given to President George W. Bush to prosecute theIraq war.

Obama had a message for both Democrats and Republicans on trade, where he wants to complete trade deals with Asia and Europe to create more export-related jobs.

He urged Congress to give him trade promotion authority, the power to negotiate free trade deals. Democrats have opposed giving him the power, fearing the deals he makes will hurt American labor.

Warning that China wants to "write the rules for the world's fastest growing region," Obama said both parties should give him the trade authority as a way of protecting American workers, "with strong new trade deals from Asia to Europe that aren't just free, but fair."

Obama is proposing tax increases of $320 billion over the next 10 years to pay for expanded tax credits and educational benefits for the middle class, including two years of free community college.

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.

In appealing for higher taxes, Obama blamed lobbyists for the current state of the tax code, saying it is riddled with loopholes that let some corporations pay nothing.

"They've riddled it with giveaways the super rich don't need, denying a break to middle class families who do," he said.

But the proposal seems dead on arrival given opposition from Republicans.

"Let's iron out loopholes to lower rates - and create jobs, not pay for more government spending," said Iowa Republican Senator Joni Ernst in excerpts from remarks that were to be the official Republican response.

For Obama, seeking to burnish his legacy, Tuesday's speech will be his best opportunity of the year to talk to millions of Americans about the improved economy six years after he first took office with the country in the grips of a crippling financial crisis.

And his proposals for wealth redistribution could serve to shape the political debate forming around who will succeed him and could help former Secretary of State Hillary Clinton, the overwhelming favorite for the Democratic presidential nomination in 2016 if she decides to run.

Obama's speech was posted online by the White House at http://bit.ly/1AK6zG0