Where's The Consumer Interest Tax Deduction?
by Deacon Blues
Mike Lillis of the Washington Independent gives us a good piece on credit card reform, noting the (to be expected) opposition from the American Banking Association (ABA), an industry that just shook down the taxpayers for the biggest swindle in history with the TARP. It appears that the Democrats once again are talking a good game but will still have some obstacles ahead of them to do anything substantive, given that Democratic senators Carper (MBNA) and Johnson (Citibank) will fight them in the Senate, and then there is Joe (MBNA) Biden at 1600 Pennsylvania Avenue. And Lillis notes that despite Barney Frank's bluster about Democratic action, the Fed's own rule changes don't kick in until 2010, which would be well into the economic wasteland we are in now.
Even if Frank and his counterparts in the Senate come up with something in the next Congress, it won't take effect until the end of the year anyway, when help is needed now. Anything they do will run into opposition from the ABA at a time when the Democrats want to pocket all the campaign cash they can get from industry, heading into the midterms. What strikes me is that Democrats haven't seized upon an obvious short-term band-aid that would help taxpayers now without pissing off the ABA.
Since Bush's credit-card foreign policy, the TARP, and impending domestic stimulus package render fiscal discipline moot for the next generation, why don't the Democrats bring back something that benefited consumers but was reduced (and eventually eliminated) in the 1986 tax reform? Since 1986, corporations and the wealthy have received numerous windfalls, havens, and tax breaks and yet this consumer benefit has been off-limits?
Specifically, why haven't the Democrats started banging the drums to re-institute the consumer interest tax deduction?