Whereas prior rules only limit the deductibility for interest on related-party debt, there is a trend to extend the deductibility restriction to all interest payments including arm's-length payments (e.g., Australia, Belgium, Denmark, Germany, and Italy).
The rich want us to change that, but in return we should sharply limit the deductibility of home mortgage interest, which, as constituted, benefits mainly them.
Mainly two approaches are used: most thin capitalization rules limit the deductibility of interest expense if the amount of debt exceeds a specific leverage ratio.
The Senate Finance bill limits the deductibility of outsized medical bills making them deductible only to the extent they exceed 10% of a family's adjusted gross income, up from 7.5% under the current law.
Specifically, the design of bonus contracts and the placement of the upper bound, and the effect of the Internal Revenue Code Section 162 (m) that limits the deductibility of cash compensation over one million dollars.
The Treasury proposes limiting the deductibility of expenses firms incur in America to support foreign operations that have paid no American tax.
So if the G.O.P. is serious about the perils of excessive borrowing, it could start by limiting the deductibility of corporate debt, which would force companies to rely more on equity financing and would discourage the kind of credit bubbles we've seen over the past fifteen years.
Limiting the deductibility of net interest as many other developed countries do would discourage excessive reliance on debt financing but would yield higher tax burdens on manufacturing and utilities, sectors with significant investments in physical capital that are often debt-financed.
It expressed no view on the notion of limiting the deductibility of sole-proprietors' losses.
In 1993, the Clinton administration limited the deductibility of regular paychecks for highly paid workers.
