The rich and powerful of the world were today divided at their annual huddle over Barack Obama's threat to raise their taxes with some saying policies that go after the wealthy will hurt growth and others that Mr Obama was right to address capitalism's imbalances.
In his State of the Union, Mr Obama focussed on channelling middle class anger at inequality, including a call for a 30 per cent minimum tax on millionaires that could make the wealth of Republican rival Mitt Romney a central election issue.
It was delivered on the eve of World Economic Forum in the Swiss ski resort of Davos, which found many of the world's titans of industry and politics in reflective mood, focusing more than ever on the question of whether capitalism needs to be more fair if it is to be successful.
Many of the wealthy at Davos made clear they don't like being in the president's crosshairs.
"I don't think any presidential election in the history of America has been won on the politics of envy and I think if anything it divides the country more than unites it," said John Studzinski, senior managing director of investment and advisory firm Blackstone Group.
Roger Altman, chairman of investment advisory group Evercore, disagreed and said improvements in the US economy and the Republican party's difficulties selecting a presidential candidate meant "the picture is brightening" for Mr Obama's re-election chances in November.
"I liked the speech," said Mr Altman. "I can understand why some people in the business community, particularly gauging the reaction to it, may not like it. But I thought it was a reasonable speech.
"It's actually a relatively moderate speech by historical standards. Has the president taken a move on the spectrum towards more populism? Yes. Is it an extreme move, or a big move by historical standards? I don't really think so," he said.
As for the 30 per cent minimum millionaire's tax proposal - known as the "Buffett tax" because it is favoured by billionaire Warren Buffett – Mr Altman said: "Speaking for myself, I find that hard to argue with."
Investment income from dividends and capital gains is taxed at a much lower top rate than wages in the United States, an issue that is likely to gain more notice now that Mr Romney, a wealthy former businessman and one of the favourites to be Republican nominee, has released returns showing he paid less than 14 per cent of his income in federal tax last year.
"I think this issue is going to become an important political issue. There has been a widening of wealth and income inequality both in the United States and across advanced economies," said economist Nouriel Roubini, once known as "Dr Doom" for bearish views predicting the financial crisis.
"Having 15 per cent tax on carried interest, or capital gains or dividends, is something that is creating a wedge in the country, so that's an issue that has to be addressed. So politically it's going to help Obama this year," Mr Roubini said.
But Harvard economist Kenneth Rogoff said the 30 per cent rate could hurt the economy. "The solution I think is a flat tax or something like that. I think what's being proposed of making the tax system more superficially progressive is just going to be a growth-slower," he said.
Mr Obama also turned his fire on banks, promising tough regulation and threatening to find and punish those responsible for the financial crash. Bankers in Davos were unsurprisingly wary.
"We should not throw the baby out with the washtub. When it comes to banks, there is no mechanism by which a modern economy can grow without strong banks and a strong financial sector," said Jacob Frenkel, chairman of JP Morgan Chase International.
Reuters