By Helen Popper
BUENOS AIRES (Reuters) - Thousands of striking Argentine truckers rallied outside the presidential palace on Wednesday to demand tax cuts in the biggest protest against President Cristina Fernandez's rule since a 2008 farm revolt.
Their one-day strike was led by Hugo Moyano, a gruff truck driver who has gone from being a close ally of Fernandez to become one of her most dangerous rivals in less than 18 months.
Moyano is running for re-election as head of the country's CGT labor federation. He also leads the 200,000-strong truckers union - feared by governments for its potential to bring Argentina to a standstill.
The truckers, who have the clout to halt everything from garbage collection to grain exports, flexed their muscles last week with a two-day fuel transport strike that caused shortages and drew an angry response from Fernandez's government.
They lifted the measure after haulage company bosses agreed to raise wages 25.5 percent, but called Wednesday's strike over income taxes and child welfare benefits, which they want extended to more families at a time of slowing growth and revenue in Latin America's No. 3 economy.
Surging salaries - which are rising roughly in line with inflation - mean more and more workers are eligible to pay income tax. Wednesday's strike was aimed at pressuring Fernandez to raise the threshold, a demand she has rejected.
"This protest march is a call to our society: we have to try to convince this government to abandon the boundless and constant arrogance it has when it comes to understanding the country's reality," Moyano said in the emblematic Plaza de Mayo that faces the pink presidential palace.
"We're willing to collaborate and do our bit in dealing with the problems that are looming. But what bothers us, what we don't like, is the way they go around imposing things," he said.
Smoke from dozens of barbecue stands drifted above the banners and the green-and-white trucker flags carried by workers who crowded the square to listen to Moyano's speech.
Some other unions - both from within Moyano's CGT and outside it - joined the protest, including teachers, public employees, airline pilots and port workers.
Center-left Fernandez, who visited a pig farm in the distant Andean province of San Luis, called on Argentines to be "united, organized and show solidarity."
In a speech on national television on Tuesday, she urged unionized workers to acknowledge the benefits they have seen as a result of a long boom that has swelled union ranks and reduced employment to about 7 percent. She said less than 20 percent of the workforce had to pay income tax.
"This president will keep on working tirelessly and every day. No extortion, no threat, insult or injury will keep me from that path," she said, standing beside a model bearing the image of famous first lady, Evita Peron, who was beloved by the country's trade unions.
Fernandez and Moyano both belong to the fragmented Peronist party that has dominated Argentine politics since the late 1940s and is closely tied to the labor movement.
Tensions caused by their split have been exacerbated by annual inflation estimated at about 25 percent.
Surging prices have also fueled capital flight and eroded the competitiveness of Argentine goods, prompting Fernandez to slap unorthodox curbs on imports and foreign currency purchases that are riling importers and the middle class.
Fernandez won re-election in October with 54 percent of votes, but her approval ratings have slid since.
(Additional reporting by Hilary Burke and Nicolas Misculin; Editing by Anthony Boadle)