US President Barack Obama has called for expanded tax credits for the poor and for a reduction in tax breaks for the rich in his annual budget proposal.

US President Barack Obama has called for expanded tax credits for the poor and for a reduction in tax breaks for the rich in his annual budget proposal.

The $3.9tn (£2.34tn) budget calls for a rise in the minimum wage and for new spending on infrastructure.

It would reduce the budget deficit by $651bn over the next decade.

It is not expected to become law, but is seen rather as a declaration of the Democratic Party's priorities ahead of the November midterm elections.

'Expand opportunities'

"Our budget is about choices, it's about our values," Mr Obama said at a news conference at a Washington primary school on Tuesday.

"As a country, we've got to make a decision if we've going to protect tax breaks for the wealthiest Americans or we're going to make smart investments necessary to create jobs and grow our economy and expand opportunities for every American."

In the budget the US president, a Democrat, proposes expanding a tax credit that benefits low-income working Americans to cover workers as young as 21 and as old as 67, as well as making it available to more workers without children.

The expansion would lower taxes for 13.5 million low-income workers, the White House said.

The programme, the earned income tax credit, was established in the 1970s and is popular with most Democrats and some Republicans.

To pay for the expansion, expected to cost $60bn over 10 years, Mr Obama has proposed ending two tax breaks often used by wealthy Americans. One, known as the "carried interest" deduction, limits taxes paid by ultra-wealthy hedge fund and private-equity fund managers. The other lowers taxes for some self-employed workers.

The budget proposal also rehashes policies previously pushed by Mr Obama.

It calls for more than $300bn in infrastructure improvements funded through changes to business taxes, and increased funding for early education paid for through higher tobacco taxes.

The White House is also repeating its call for a rise in the federal minimum wage to $10.10 an hour from $7.25 and for an extension of unemployment benefits for people who have been out of work for a long time. Those benefits expired in December, and their renewal has been blocked by Republicans who demand offsets in other spending.

Mr Obama also proposes $56bn in new spending, including $28bn for defence research and weapons modernisation, and $28bn split among education technology, research, job training and other projects.

The budget aims to reduce the annual US budget deficit to 1.6% of the economy by 2024, down from an estimated 3% this year.