"Right now, our most immediate priority is stopping a tax hike on 160 million working Americans while the recovery is still fragile," Obama said during the State of the Union before a joint session of Congress.
"People cannot afford losing $40 out of each paycheck this year. There are plenty of ways to get this done," Obama said. "So let's agree right here, right now: No side issues. No drama. Pass the payroll tax cut without delay."
The daunting task of reducing the deficit means making choices, including re-examining the tax code, he said.
"Right now, we're poised to spend nearly $1 trillion more on what was supposed to be a temporary tax break for the wealthiest 2 percent of Americans. Right now, because of loopholes and shelters in the tax code, a quarter of all millionaires pay lower tax rates than millions of middle-class households. Right now, [billionaire] Warren Buffett pays a lower tax rate than his secretary," Obama said.
"Do we want to keep these tax cuts for the wealthiest Americans? Or do we want to keep our investments in everything else like education and medical research; a strong military and care for our veterans? Because if we're serious about paying down our debt, we can't do both," Obama said.
Obama said he told House Speaker John Boehner, R-Ohio, during the summer he was prepared to work on reforms that would rein in long-term costs of Medicare and Medicaid and strengthen Social Security "so long as those programs remain a guarantee of security for seniors."
But, he said, the tax code needs to be changed "so that people like me, and an awful lot of members of Congress, pay our fair share of taxes."
"Tax reform should follow the Buffett rule: If you make more than $1 million a year, you should not pay less than 30 percent in taxes," Obama said.
Sen. Tom Coburn, R-Okla., was correct in stating "Washington should stop subsidizing millionaires," Obama said. "In fact, if you're earning a million dollars a year, you shouldn't get special tax subsidies or deductions.
"On the other hand, if you make under $250,000 a year, like 98 percent of American families, your taxes shouldn't go up," Obama said. "You're the ones struggling with rising costs and stagnant wages. You're the ones who need relief."
While some in Washington can "call this class warfare all you want," Obama said, most Americans likely would say asking a billionaire to pay at least as much as his secretary in taxes was common sense.
No one begrudges financial success, he said, and when people talk about tax reform that would ask people "like me" to pay his fair share, "it's not because they envy the rich."
"It's because they understand that when I get tax breaks I don't need and the country can't afford, it either adds to the deficit, or somebody else has to make up the difference -- like a senior on a fixed income; or a student trying to get through school; or a family trying to make ends meet," Obama said. "That's not right. Americans know it's not right."
Everybody sharing the "same sense of shared responsibility" is how the deficit will be reduced, the president said.
"That's an America built to last," Obama said.
Notable deaths of 2014 [PHOTOS]