Obama, surrounded by middle-class families and workers who would benefit from the extension, called on Congress to extend the tax cuts for "98 percent of Americans who make less than $250,000 for another year" while allowing tax cuts that benefit the nation's wealthiest taxpayers, "like me," to expire.
Obama said "millions of American families" could see their taxes rise by as much as $2,200 a year beginning Jan. 1 if nothing happens.
"It would be a big blow to working families and a drag on the economy," Obama said.
To those who oppose ending the tax cuts for the wealthiest Americans, Obama said the country tried top-down economics and "it didn't work."
He also countered arguments tax cuts aid job creators by saying most of the jobs were created by small businesses and 97 percent of small businesses would see their lower tax rates preserved.
The money being spent on tax cuts for the wealthy is "a major driver of deficits," and would amount to about $1 trillion over 10 years and least likely to promote growth, he said.
"We can't afford to keep this up right now," he said.
"I believe we should get together and get this done," Obama said, acknowledging that "not everyone agrees with me" about letting the upper-income tax cuts expire, but "we all agree on extending [the rates] for 98 percent of the American people."
"Let's agree to do what we agree on, right?" Obama said to applause. "Let's not hold the vast [majority of] Americans hostage while we debate merits of another tax cut for the wealthy."
"We can have that debate, but let's not hold up the thing we already agree on," he said.
"My message to Congress is this: Pass a bill extending tax cuts for the middle class; I will sign it tomorrow," Obama said. "As soon as that gets done, we can continue to have debate on whether it's a good idea to extend tax cuts for wealthiest Americans."
Presumptive Republican presidential nominee Mitt Romney's campaign issued a statement saying raising taxes on those earning more than $250,000 is "the last thing we need to do."
Obama's position "just proves again the president doesn't have a clue on how to get America working again," the statement issued by Romney spokeswoman Andrea Saul said on Romney's Web site.
"Almost half-a-million fewer Americans are working today than the day Barack Obama took office, and we've just come through the worst job creation quarter in two years," Saul said. "Unlike President Obama, Governor Romney understands that the last thing we need to do in this economy is raise taxes on anyone. He has a plan to permanently lower marginal rates, help middle-class Americans save and invest, and jump-start economic growth and job creation."