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Interest deduction for car buyers?

February 04, 2009

Like every stimulus bill, the current one promises to stimulate the tax preparation business. The Senate yesterday voted to add an above-the-line deduction for interest on loans to buy new cars.

Which only makes sense. The economic crisis was largely caused by reckless government-subsidized borrowing. Let's do some more of that! Like so many other misguided tax subsidies, this would phase out at higher income levels, adding still more complexity to the tax law. But it will be just the ticket to enable some buyers to move up to a Lexis from a Toyota, which is what this country really needs.

To his credit, Senator Grassley opposed the bill. The TaxGrrrl has some more thoughts.

Tags: Grassley.Tax Grrrl.tax policy.