Tradeoff

Suppose we eliminate the tax deduction for interest expense. Yeah, I know: Most of that deduction was eliminated back in 1990-91. But now, suppose we eliminate the rest of it. All of it. Gone.

That would be hard on a lot of people. I expect it would be good for the economy, after a few years maybe. But it would be hard.

So I propose a trade-off: Eliminate the tax deduction for interest expense, and replace it with a tax deduction for accelerated repayment of debt. That way, taxpayers break even, and we do good things for the economy.

Or set up the tax deduction for accelerated repayment of debt as an option. Give taxpayers the choice: Either take the existing deduction for interest expense, or take the new deduction for accelerated repayment of debt.

Oh, one more thing: It applies to everybody. Not just to people filing the individual tax form. It applies to businesses as well.

Then you'd start to see some changes in our economy!