MARY LOUISE KELLY, Host:
NPR's business news starts with tax day.
(SOUNDBITE OF MUSIC)
LOUISE KELLY: David, welcome to back.
DAVID WESSEL: Thank you.
LOUISE KELLY: So let's start with the bottom line. Given everything we're hearing about the size of the deficit and all this pressure to raise revenue is it safe to assume our taxes are going to go up?
WESSEL: You know, that payroll tax is important. It's about 45 percent of all the taxes that individuals pay. Now the income taxes, the ones that are due today, well, the Bush tax cuts expire at the end of 2012, and unless Congress does something, taxes will go up then too.
LOUISE KELLY: And, of course, a big partisan debate over whether to extend those tax cuts or whether they should go up again, those income taxes.
WESSEL: That's right. Republicans generally want to extend the all; the president wants to extend them, but only for those families making less than 250,000 a year. That would bring in about $700 billion over the next 10 years by raising income taxes on the top by back to where they were before President Bush took office.
LOUISE KELLY: David, both Republicans and Democrats talking a lot this season about tax reform, trying to tighten some of these loopholes in the tax code. What's your prediction? How likely is it we'll actually see some action on that?
WESSEL: Now Republicans think this is a good idea but they generally use that money to lower tax rates and collect the same amount of money. The president now says he wants to raise $1 trillion over the next decade or so on top of his other proposed tax increases to reduce the deficit by getting rid of or curtailing some of what he's now called spending through the tax code or tax expenditures.
LOUISE KELLY: Well, are there specific deductions that are being targeted? Any of the big ones, mortgage interest that we're all able to deduct off our home loan payments, for example?
WESSEL: You're right. The big bucks are in some of the most popular deductions, by deducting your mortgage interest or, you know, property taxes or excluding from your taxable income, the value of the health insurance premiums that your employers pay, the charitable deductions, each has its own reason for being, each has a constituency. One option I think is not to target any particular one, but limit the amount of deductions and credits you can take.
LOUISE KELLY: And just quickly, David, we've been talking here about individual taxes. What is likely to happen with taxes on businesses?
WESSEL: Ah. Well, corporations today pay relatively small slice of all federal tax revenue. About 12 to 13 percent in ordinary times are paid by corporations. The top tax rate is 35 percent. But they have so many deductions and credits that pay a lot less. So there's a lot of talk about corporate tax reform but very little talk about increasing the share of taxes paid by companies, because people are worried that that would make the economy less efficient and hurt us in the long run.
LOUISE KELLY: Okay. Thanks, David.
WESSEL: You're welcome.
LOUISE KELLY: That's David Wessel of The Wall Street Journal. Transcript provided by NPR, Copyright NPR.