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Trump Proposes Car Loan Interest Tax Deduction, Costing $173 Billion

Oct 12, 2024, 05:10 AM

Former President Donald Trump has introduced a new proposal to make car loan interest tax-deductible. According to an analysis by The Budget Lab, the policy could cost the government $173 billion over 10 years if the deduction is above-the-line, and $71 billion if itemized. The average tax benefit would range from $135-225 for the bottom fifth of earners and $1,475-1,570 for the top 1%. Critics, including CBS News, argue that the policy would not benefit the wealthy, who typically pay cash for cars, but rather the middle class and lower-income individuals who rely on auto loans. Additionally, some suggest the policy is aimed at benefiting auto dealership owners, a key segment of the Republican base.