It’s Fix the Tax Code Friday!
Not too long ago, I answered an “ask the taxgirl” question about credit card interest on tax returns. It was surprising to hear that some folks still believed that personal interest was deductible – especially since it had been eliminated over 20 years ago. My fellow tax bloggers were similarly surprised, perhaps wondering if we’d been thrown back to the land of Hammer pants, shoulder pads and leg warmers.
Like the recent return of those same Hammer pants, shoulder pads and leg warmers (please God, let it be a short and painless stay), personal interest deductions are now back in the news. Senator Mikulki has managed to push through what I think is an ill-advised tax break for new car loan interest as a potential piece of the new stimulus package. Is a return of personal interest deductions for credit cards next?
Weigh in.
Today’s Fix the Tax Code Friday question is:
Should we allow consumers to deduct personal interest (from personal loans, credit cards and more) on their tax returns?
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