Campaign promise fulfilled: student loan forgiveness

[Lemon Drop]

C(-)ris wrote:
[quote=DeusxMac]
[quote=C(-)ris]
Can I get $20k because I have a mortgage...

As a matter of fact, the government will assist you.

Publication 936 (2021), Home Mortgage Interest Deduction

C(-)ris wrote: ... or a car loan?

IRS issues standard mileage rates for 2022

Bottom line, it's believed that it's more beneficial to society as a whole, that you get an education than that you get a car.
I would be happy to fund the student loan forgiveness as a DEDUCTION and not a CREDIT. There is a HUGE difference. A deduction will reduce your tax bill to zero and you won't owe anything, however you also will not get back more than you paid, any "refund" you get would be your own money that was withheld. Once you hit zero that is it. The Credit will provide $20k even if you paid in zero.
I believe your plan would cost the federal government far more than simply forgiving $10k or for some $20k in student loan principle. Think in terms of comparative revenue for the federal govt.

The median American taxpayer contributes $15k to the federal govt every year, so if you wipe out the tax bill for 43 million mostly middle class taxpayers via a one time deduction, that's a lot of lost revenue compared with interest paid on $10k in loans over the same period. And low income workers would get a bigger check through the earned income credit. (No, once you hit zero that is not it, if you are low income)

Why not just reduce the loan balance. What is this deduction supposed to do?

For those dismissing this as a political ploy.. take a look at the full plan
It includes extensive reforms to higher ed financing.