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It's only talking about mortgage interest. That's a pity. I'd like to read a well-written piece about how interest deduction for business works out. It seems
by mooism2 14y ago
It's only talking about mortgage interest.
That's a pity. I'd like to read a well-written piece about how interest deduction for business works out. It seems designed to make it easier for businesses to invest, but I wonder how the costs of leveraged buyouts etc compare.
- 001sky 14y agoThe analysis is the same. The tax-deduction is a subsidy to the <equity> holders, of whatever asset class. So, for homes, the subsidy accrues to the equity holder. For business, the same thing. Policywise, housing is consumption (luxury, in particular) and business capital structure is investment. Subsidizing the latter has a far stronger policy rationale per-se but the capture technique (components of cost or net profit) is arbitrary. Analytically, see: http://en.wikipedia.org/wiki/Modigliani%E2%80%93Miller_theorem#With_taxes http://en.wikipedia.org/wiki/Modigliani%E2%80%93Miller_theor....