Swedish government ups taxes, spending on welfare, military

Sweden's left-leaning government has proposed raising taxes and welfare benefits and boosting military spending in its first budget bill since taking office after last month's election.

That would reverse many reforms by the previous center-right government, which had trimmed Sweden's famously high taxes.

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Prime Minister Stefan Lofven's minority government of Social Democrats and Greens proposed raising income taxes for Swedes earning more than 600,000 kronor ($83,000) annually, increasing unemployment and sick leave benefits and adding 680 million kronor ($94 million) to next year's defense budget.

Higher defense spending was expected even before the submarine hunt that started Friday in waters off Stockholm.

Opposition parties criticized the budget as a "tax shock" and "left turn." They could force a new election if they manage to agree on a counterproposal.