Biden budget highlights: Lots of spending, taxing the rich

WASHINGTON (AP) — President Joe Biden's $6 trillion budget proposal offers major new initiatives like child and elder care subsidies, generous tax credits for families and the working poor, and free community college. It also promises politically freighted tax increases on the wealthy and corporations and would give domestic Cabinet departments significantly bigger budget increases than the Pentagon.

But like all presidential budget plans, Biden's proposal needs the approval of lawmakers, who can change the allotments and dollar figures.

Here are some other things to keep in mind about Biden's budget:

LOTS OF SPENDING

This year's $6 trillion spending total — fueled by ongoing COVID-19 relief efforts — is actually down from a projection of $7.2 trillion for the budget year ending in September. But it's sharply higher than the pre-pandemic $4.4 trillion tally of 2019 and fueled by promises of government help for crushing child care, college, health care and elder care costs. But the nation's huge defense budget would get minimal increases, angering Republicans whose votes Biden needs.

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TAXING BUSINESS AND THE RICH

Biden promises $2 trillion in corporate tax hikes, including an increase from 21% to 28% in the corporate rate and restoring the top individual tax bracket from 37% to 39.6%. Capital gains taxes would increase for wealthier investors, and inherited capital gains would no longer be tax-free. It would extend Democrats' generous increase in the per-child tax credit from $2,000 to $3,600 for children up to 6 years old and $3,000 for older children. It would also crack down on unpaid taxes by boosting reporting and enforcement.

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BARRELS OF RED INK

Several rounds of pandemic relief swelled last year's deficit to $3.1 trillion, and the U.S. is on track for a...