EC>~> It wasn't that long ago that all interest was deductible.  One
EC>~> downside  of removing the deduction, is more government double
EC>~> taxation.  You pay  taxes on your interest payment and the
EC>~> recipient also pays taxes on it  as income.

EC>Yeah, that was a nice luxury back when even CREDIT CARD interest
EC>could be deducted.  But it was still a case of the general body of
EC>taxpayers subsidizing the debt of some.

EC>The double-taxation argument works on dividend income, but not on
EC>interest deductions.  No one pays tax on their interest expenses.
EC>They pay tax on their income, and then they spend or save from their
EC>after-tax income.  Paying interest on a loan is just a regular
EC>expenditure.  I can understand the motivation behind the mortgage

It is a regular expenditure that someone else claims as income and thus 
is taxed.  One could argue that argue that by paying interest you get 
nothing in return (i.e. you aren't buying anything) whereas with other 
expenditures you actually receives goods or services.  


EC>deduction, just like I can understand why some like the idea of
EC>deductions for student loans.  But it costs well over a hundred
EC>billion to encourage people to take out a mortgage (or to move up to
EC>a more expensive house than they would buy without the deduction).
EC>That's a lot of money for a small result.  

I agree that it distorts the marketplace but just about anything this 
government is involved in does that.  That's part of the problem with a 
government that sucks $3T+ out of the economy each year (much more if 
you count the state and local governments).

Jeff

CMPQwk 1.42-21 9999 
Progressive taxation is economic slavery for those who succeed .....

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