The writer fails to understand that the debt interest costs are not comparable to business costs, but dividend payments on equity. Interest cost is a payment fo

The writer fails to understand that the debt interest costs are not comparable to business costs, but dividend payments on equity. Interest cost is a payment for capital, as is dividend. If debt is favored in taxation over equity, it causes the companies to be overleveraged, and I do not see what is the benefit for society from that. (Note that the capital structure of company does not in theory affect total value of business, see Modigliani & Miller)