President Barack Obama is sending Congress a $4 trillion US budget that would boost taxes on higher-income Americans and corporations. It would use the money to get rid of tight budget spending caps, fund an ambitious public works program and provide middle-class tax relief.

Obama's budget, which will set off months of wrangling in Congress, proposes spending $4 trillion — $3.999 trillion before rounding — in the budget year that begins Oct. 1.

That's a 6.4 per cent increase over projected spending this year. It projects the deficit will decline to $474 billion in 2016.

The budget includes an ambitious $478 billion public works program for highway, bridge and transit upgrades.

Tax on company's foreign profits

On the weekend, the White House also revealed there would be a one-time mandatory tax of 14 per cent on profits that U.S. companies have amassed overseas.

That's lower than the current top corporate rate of 35 per cent, and it would be accompanied by an administration plan to overhaul corporate taxes to end some tax breaks and lower rates overall.

Obama's budget also called also is calling for a $60 billion program for free community college for an estimated 9 million students if all states participate. It also proposes expanding child care to more than 1.1 million additional children under the age of 4 by 2025 and seeks to implement universal pre-school.

Obama also wants to require estates to pay capital gains taxes on securities at the time they are inherited.

In a message accompanying the massive budget books, Obama says his proposals are "practical, not partisan."

The budget Obama has proposed is a beginning only in his negotiations with the Republican-controlled Congress. Even before the books were delivered, Republicans found plenty to criticize in tax hikes totalling $2 trillion.

"The president is advocating more spending, more taxes and more debt," said House Speaker John Boehner. "A proposal that never balances is not a serious plan for America's fiscal future."

Boehner and other GOP leaders said that the budget they produce this spring will achieve balance within 10 years, curb the explosive growth of government benefit programs and reform the loophole-cluttered tax code.

$320B more in taxes on wealthy, corporations

In a lengthy run-up to Monday's budget release, the administration highlighted a number of its proposals, including $320 billion in increased taxes on the wealthy and corporations that would be used to pay for expanded middle class tax breaks.

The budget documents reveal that all the tax increases will total $2 trillion, including a number of proposals Obama has made before to limit deductions the wealthy can take to reduce their tax bill.

Wealthy people would only be able to take tax deductions at the 28 per cent rate even if their income is taxed at 39.6 per cent and would also see an increase in their maximum capital gains rate to 28 per cent instead of 24.2 per cent.

All told, Obama proposes higher receipts of about $2 trillion in his budget: about $1.5 trillion come from tax increases and almost $500 billion from fresh revenue as immigration changes lift the economy and provide new workers.

Among those benefiting from Obama's proposed tax cuts would be couples earning up to $120,000 a year who would qualify for a new "second earner" credit of up to $500 as well as a maximum $3,000 child care credit for two children, triple the current $1,000.

Not all of Obama's tax hikes would hit the wealthy. His budget also proposes to raise $95 billion over the next decade by hiking the tax on cigarettes from the current $1.01 per pack to $1.95.

'Mindless austerity'

Obama's spending plan would ease tight budget constraints imposed on the military and domestic programs back in 2011 when lawmakers were responding to the public outcry over deficits that were then topping $1 trillion a year.

Obama's budget calls these caps, known as sequestration, "mindless austerity." The elimination of the budget caps this will boost spending by $74 billion — divided between the military and domestic programs — in 2016 and would result in a spending increase over the remaining six years the caps were to have been in place of $362 billion.

While many Republicans support easing the budget caps for the military, they oppose reducing the limits on domestic programs. Obama said Monday he would not accept a budget that boosts national security programs at the expense of domestic programs.

"It would be bad for our security and bad for our growth," he said in a visit to the Homeland Security Department.

In a budget agreement reached in late 2013, the budget caps were eased but not eliminated for 2014 and 2015. They are to go back in force in 2016.

Help out middle class

The administration said the budget represented a strategy to strengthen the middle class and help "hard-working families get ahead in a time of relentless economic and technological change."

"This country's better off than it was four years ago, but what we also know is that wages and incomes for middle class families are just now ticking up," Obama said in an interview broadcast on Monday's Today Show on NBC. "They haven't been keeping pace over the last 30 years compared to, you know, corporate profits and what's happening to folks in the very top."

Republicans, however, accused the president of seeking to revert to tax-and-spend policies that will harm the economy while failing to do anything about the budget's biggest problem — soaring spending on government benefit programs.

Obama's budget projects a deficit of $583 billion in 2015, up significantly from last year's $485 billion imbalance. Obama's budget plan never reaches balance over the next decade and projects the deficit would rise to $687 billion in 2025.

The administration contends that various spending cuts and tax increases would trim the deficits by $1.8 trillion over the next decade, leaving the red ink at manageable levels.