IDEAS home Printed from https://ideas.repec.org/a/sae/pubfin/v5y1977i1p3-7.html
   My bibliography  Save this article

Tax Deductibility of Interest On Consumer Debt

Author

Listed:
  • Melvin I. White

    (Brooklyn College, City University of New York)

  • Anne White

Abstract

In theoretical and practical discussion of the income tax treatment of personal expenditures, interest cost on consumer debt has been a persistent subject of misunderstanding. This article shows the source of the misunderstanding to be twofold: an erroneous theoretical conclusion that deduction of consumer interest cost is inconsistent with an ideal definition of income, and a confusion about the "second best" treatment of interest cost incurred to purchase durable goods when the tax law already lapses from the ideal by not inputing rental values. The article suggests that even for durable goods purchases the continuance of deductibility is probably best.

Suggested Citation

  • Melvin I. White & Anne White, 1977. "Tax Deductibility of Interest On Consumer Debt," Public Finance Review, , vol. 5(1), pages 3-7, January.
    • Handle: RePEc:sae:pubfin:v:5:y:1977:i:1:p:3-7
    DOI: 10.1177/109114217700500101
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/109114217700500101
    Download Restriction: no
    File URL: https://libkey.io/10.1177/109114217700500101?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bittker, Boris I, 1973. "Income Tax Deductions, Credits, and Subsidies for Personal Expenditures," Journal of Law and Economics, University of Chicago Press, vol. 16(2), pages 193-213, October.
    2. Aaron, Henry, 1970. "Income Taxes and Housing," American Economic Review, American Economic Association, vol. 60(5), pages 789-806, December.
    3. C. Harry Kahn, 1960. "Personal Deductions in the Federal Income Tax," NBER Books, National Bureau of Economic Research, Inc, number kahn60-1.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cebula, Richard, 1973. "Interstate Migration and the Tiebout Hypothesis: An Analysis According to Race, Sex, and Age," MPRA Paper 49827, University Library of Munich, Germany, revised 01 Feb 1974.
    2. Gabriel, Stuart A. & Rosenthal, Stuart S., 2005. "Homeownership in the 1980s and 1990s: aggregate trends and racial gaps," Journal of Urban Economics, Elsevier, vol. 57(1), pages 101-127, January.
    3. Brent W. Ambrose & Patric H. Hendershott & David C. Ling & Gary A. McGill, 2022. "Homeownership and taxes: How the TCJA altered the tax code's treatment of housing," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 50(5), pages 1167-1200, September.
    4. Simone Pellegrino & Massimiliano Piacenza & Gilberto Turati, 2011. "Assessing the Distributional Effects of Housing Taxation in Italy: From the Actual Tax Code to Imputed Rent," CESifo Working Paper Series 3368, CESifo.
    5. Joseph Teyu Chou & Chien-Hao Fu, 2022. "Which Families Benefited from the Recent Personal Income Tax Reform in Taiwan: Evidence from the Administrative Data," Journal of Family and Economic Issues, Springer, vol. 43(3), pages 433-451, September.
    6. Scholten, Ulrich, 1999. "Die Förderung von Wohneigentum," Beiträge zur Finanzwissenschaft, Mohr Siebeck, Tübingen, edition 1, volume 8, number urn:isbn:9783161472343, September.
    7. Erling Røed Larsen, 2009. "From data to levy design. The five stages of implementing housing taxes," Discussion Papers 596, Statistics Norway, Research Department.
    8. van Suntum, Ulrich, 2008. "Optimal consumption and taxation of housing: A life cycle approach," CAWM Discussion Papers 3, University of Münster, Münster Center for Economic Policy (MEP).
    9. Philippe Thalmann, 2007. "Tenure-neutral and Equitable Housing Taxation," Urban Studies, Urban Studies Journal Limited, vol. 44(2), pages 275-296, February.
    10. Conway, Karen Smith & Rork, Jonathan C., 2012. "The Genesis of Senior Income Tax Breaks," National Tax Journal, National Tax Association;National Tax Journal, vol. 65(4), pages 1043-1068, December.
    11. Suntum, Ulrich van, 2009. "Housing, taxation and retirement provision," Journal of Housing Economics, Elsevier, vol. 18(3), pages 249-255, September.
    12. Figari, Francesco & Paulus, Alari & Sutherland, Holly & Tsakloglou, Panos & Verbist, Gerlinde & Zantomio, Francesca, 2012. "Taxing Home Ownership: Distributional Effects of Including Net Imputed Rent in Taxable Income," IZA Discussion Papers 6493, Institute of Labor Economics (IZA).
    13. Anastasia Girshina, 2016. "Implications of Fiscal Policy for Housing Tenure Decisions," Working Papers 2014:, Department of Economics, University of Venice "Ca' Foscari".
    14. Jacquelene M. Browning, 1979. "Estimating the Welfare Cost of Tax Preferences," Public Finance Review, , vol. 7(2), pages 199-219, April.
    15. Judith Yates, 1982. "An Analysis of the Distributional Impact of Imputed Rent Taxation," The Economic Record, The Economic Society of Australia, vol. 58(2), pages 177-189, June.
    16. Francesco Figari & Gerlinde Verbist & Francesca Zantomio, 2022. "Homeownership Investment and Tax Neutrality: a Joint Assessment of Income and Property Taxes in Europe," International Journal of Microsimulation, International Microsimulation Association, vol. 15(2), pages 62-76.
    17. Bruno Bises & Antonio ScialÃ, 2014. "The Taxation of Owner-Occupied House in Italy: 1974-2014," Public Finance Research Papers 7, Istituto di Economia e Finanza, DSGE, Sapienza University of Rome.
    18. Richard J. Cebula, 1982. "A Note on the Impact of Right-to-Work Laws on the Cost of Living in the United States," Urban Studies, Urban Studies Journal Limited, vol. 19(2), pages 193-195, May.
    19. Edward J. Kane, 1980. "Accelerating Inflation and the Distribution of Household Savings Incentives," NBER Working Papers 0470, National Bureau of Economic Research, Inc.
    20. Tuukka Saarimaa, 2011. "Imputed Rental Income, Taxation and Income Distribution in Finland," Urban Studies, Urban Studies Journal Limited, vol. 48(8), pages 1695-1714, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:pubfin:v:5:y:1977:i:1:p:3-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.