Previously,
most interest on consumer debt was tax-deductible. That was good
news
for people who got auto loans in the '80s
for Pintos and Fieros equipped with the latest eight-track stereo
technology. But it was a bad deal for the federal government,
which, by the mid-1980s, was hip deep in budget deficits. To
reduce the need to raise income tax rates, Congress and President
Reagan yanked the tax deduction for consumer interest. Except
for mortgage debt. The deduction for mortgage interest remained.
That goes for home equity debt up to $100,000.
Equity rates
Tax deductibility
