Is it too soon to talk about raising taxes?
A tax file with the word "taxes."
STEVE CHIOTAKIS: President Obama tomorrow will outline his vision of federal budgets to come. And that vision reportedly includes raising taxes on wealthy Americans. The Republican plan unveiled last week by House Budget Committee Chairman Paul Ryan is a little different. The Bush tax cuts are made permanent and corporate tax rates go down.
You're gonna hear a lot about the politics of the plans going forward, but this morning we're here to talk practicality. David Cay Johnston is professor of tax and business regulation at Syracuse University. Good morning.
DAVID CAY JOHNSTON: Good morning.
CHIOTAKIS: Is it too soon to talk about raising taxes -- just after one of the worst economic downturns in this country's history?
JOHNSTON: Oh I think we should've been talking about raising taxes a long time ago, Steve. I don't think many people realize because of all the talk that lower taxes will lead to more revenues that the personal income tax is bringing in 27 percent less money than it brought in in the recession year of 2001.
CHIOTAKIS: What about cutting taxes? Is it possible to give tax relief while trying to make a dent in the national debt? Can you do all those things at once?
JOHNSTON: Sure you can if you want to. This appears to be a fuzzy map. More than 50 percent of our federal budget is spent on military and security. That's the reason that between 2000 and 2009 the total federal debt doubled -- half was because of reduced taxes and half was because of spending that we didn't finance. Things we think of as federal government functions -- inspecting food to make sure it's safe and providing a legal system for dealing with contract disputes for business -- that's about 11 percent of federal spending.
CHIOTAKIS: David Cay Johnston, professor of tax and business regulation at Syracuse University's College of Law. David thanks.
JOHNSTON: Thank you.