Monday, March 23, 2009
My Idea For Today
Everyone has their opinion about the Stimulus Plan, and I am no exception. Here is a simple idea that will put more money into the hands of hard working people and families.
As you may or may not know, people that own a home and have equity in their home can get a Home Equity Loan from a bank. Home Equity Loans permit homeowners to borrow money, but more importantly, they permit homeowners to deduct their interest expense on the Home Equity Loan from their taxes. Just as mortgage interest is tax deductible, so too is the interest on a Home Equity Loan.
People that have Home Equity Loans do not have to carry a balance on their credit cards and pay a higher interest rate that is also not deductible from their Federal Income Tax. My proposal would be to permit the interest rate expense on credit cards to be deductible the same way that the interest rate charges on a mortgage or Home Equity Loan are deductible for homeowners.
There must be millions of people, young and old, that rent and do not have this option because they do not own property on which to get a Home Equity Loan. But, by giving anyone and everyone that pays interest on a credit card balance the opportunity to deduct their interest expense on their Federal Income Tax filing, would put money back in the hands of people that are almost certainly struggling to keep their heads above water. I have no exact number as to how much money this would put back in the hands of working families, but I would be willing to bet that conservatively speaking, it could amount to several billion dollars.
I think this would level the tax playing field a bit. As so many people are losing their homes and even more are on the edge of losing their homes, giving people the opportunity to deduct their interest expense on all their credit cards at the end of the year could amount to a big enough number that would certainly permit more money to get back in the hands of people and families that need it.
That is my idea for today. Simple. To the point. I think this idea is a good idea and would make for a better Stimulus Plan. What do you think?