The better wikipedia article would be http://en.wikipedia.org/wiki/Tax_shield http://en.wikipedia.org/wiki/Tax_shield Debt itself (as a liability) is definitel

The better wikipedia article would be http://en.wikipedia.org/wiki/Tax_shield http://en.wikipedia.org/wiki/Tax_shield Debt itself (as a liability) is definitely not deducted from profit, but repayment of debt is deducted from the profit, and - what is more important - interest on debt is deducted from the tax base as a result. Which means that if you can load up on debt to get higher return, than you would get investing your own money.