Tax breaks on auto loan interest may not help many Americans

When candidates make policy proposals on the campaign trail, they often sound beneficial but don't always hold up to closer scrutiny. Another recent example is Trump's suggestion during a speech at the Detroit Economic Club that his administration would make car loan interest fully tax deductible. Making car loan interest tax deductible might sound appealing, but likely would not change most people's tax situations Thus, while making car loan interest tax deductible might sound appealing, it likely would not change most people's tax situations. For one, personal interest — including car loan interest — used to be tax deductible only for those who itemized, but the Tax Reform Act of 1986 under former President Ronald Reagan got rid of this deduction, in part because most people take the standard deduction anyway. During Trump's presidency, the Tax Cuts and Jobs Act of 2017 raised the standard deduction and cut many deductions that used to be eligible for itemizing, so it would be a departure from his and other Republicans' tax policies to create an above-the-line adjustment for car loan interest.