The Effect of the 1986 Tax Act On Personal Interest Deductions
James E. Long
Additional contact information
James E. Long: Auburn University
Public Finance Review, 1989, vol. 17, issue 3, 243-263
Abstract:
For most taxpayers who itemize deductions, the 1986 tax act will increase the after-tax cost of interest paid to purchase homes, automobiles, other consumer items, and personal investment assets. Individual tax-return data are used to estimate the elasticity of interest deductions, both home moi tgage and other, with respect to the marginal tax rate and disposable income. Based on these estimates, we show that the lower tax rates and increased standard deductions in the new law can be expected to reduce interest deductions, especially among upper-income taxpayers. The findings suggest that outlays on owner-occupied housing will be more affected by the 1986 tax reform than will other types of expenditures financed with consumer credit.
Date: 1989
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/109114218901700301 (text/html)
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:17:y:1989:i:3:p:243-263
DOI: 10.1177/109114218901700301
Access Statistics for this article
More articles in Public Finance Review
Bibliographic data for series maintained by SAGE Publications ().