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Administration’s Preference for Keeping Interest Deduction May Snarl Tax Reform

House Speaker Ryans plan calls for eliminating the deductibility of interest payments.

By Lynnley Browning and Sahil Kapur, Bloomberg | Updated on May 15, 2017

President Donald Trump is leaning toward preserving a trillion-dollar tax break for corporate borrowers — a move that economists say could jeopardize his goal of robust economic growth.

The administration’s “preference” is to keep so-called interest deductibility, which allows companies to subtract interest payments from taxable income, Treasury Secretary Steven Mnuchin told The Economist in a joint interview with Trump. Their remarks, published Thursday, reveal a new fissure between Trump’s vision for tax policy and that offered by House Speaker Paul Ryan.

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