Trump Proposes Car Loan Interest Deduction
Audio version available here (1 min. 35 sec.)
As we get closer to the 2024 presidential election, the candidates are not done unveiling new legislation proposals. Most recently, Republican candidate Donald Trump revealed new campaign promises while speaking at the Detroit Economic Club.
The former president is hoping to clinch his second term with promises of lower tax rates, higher tariffs on imported goods, and an elimination of taxes on tip wages. Now, he has added a few more incentives. Primarily, he supports making interest paid on car loans a tax deduction. This is similar to how interest paid on a mortgage is tax deductible. With consumers paying an average interest rate of 7.1% for new cars and 11.2% for used cars, this proposal could be a significant deduction.
He also has proposed even higher tariffs on China. Trump previously announced that he would impose a 10-20% hike on tariffs for most nations, but on China specifically, he’d raise tariffs to at least 60%. Now, he has supplemented that proposal by claiming he would raise tariffs on Chinese vehicles from 100-1,000%.
These proposals join his previous promises to help American businesses by lowering the corporate income tax rate (currently 21%) down to 15%, and his plan to help tipped employees by making tips no longer count as taxable wages.
However, an important factor to keep in mind for these potential tax cuts is that they need to be passed by Congress. Garnering bipartisan support in both the House and the Senate has historically been difficult. An example is the recent Tax Relief for American Families and Workers Act. The House passed the legislation easily, but the bill then stalled in the Senate, and has now been effectively buried.
As both candidates continue to unveil their campaign promises that could affect business owners like you, check in with the XQ CPA blog to stay informed. We provide daily tax and business updates just for you. If you are looking for more personalized tax advisory, then feel free to reach out to our tax professionals at the number or link below. We’d love to help you.
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