[lbo-talk] The tax deductibility of debt

[Matt]

On Tue, Aug 31, 2010 at 03:22:00PM -0400, Michael Pollak wrote:
> 
> What's the rationale and origin for the tax deductibility of interest 
> payments?  Besides mortages -- I understand the original rationale there. 
> But I don't understand it for any other business or consumer financing. 
> And was there a specific moment in time when this decision was taken or 
> did it just sort of accrete?

Barry Ritholtz wrote about this recently.  He takes issue with the
belief that the mortgage interest deduction was a policy designed to
encourage home-ownership; he claims it is an hsitorical anachronism
from when all interest was deductible when the income tax was
originally introduced.

http://www.ritholtz.com/blog/2010/08/a-brief-history-of-the-mortgage-interest-deduction/

Matt

-- 
GnuPG Key ID: 0xC33BD882
aim/google/MSN/yahoo: beyondzero123

In small proportions we just beauties see,
And in short measures life may perfect be.

     -Ben Jonson