CBS News
Trump wants to make auto loan interest tax-deductible. It would mostly help the rich., experts say.
Donald Trump is now pitching a new tax cut that, on the face of it, would seem to benefit almost every American who owns a car.
The former president on Thursday proposed making interest on auto loans tax-deductible, an idea that is similar to the mortgage interest deduction, which allows some homeowners to reduce their taxable income by the amount of money they pay in mortgage interest each year.
Since it was introduced more than a century ago, the mortgage interest deduction has helped boost homeownership in the U.S. by making real estate purchases more affordable to families — a theme that Trump echoed in his proposal to extend the idea to car purchases. Americans owe about $1.63 trillion in auto loans, making it the second-largest category of debt after home loans, according to Federal Reserve data.
“We’re going to make it fully deductible, the interest payments, that’s going to revolutionize your industry,” Trump said Thursday during a nearly two-hour speech at the Detroit Economic Club. “This will stimulate massive domestic auto production and make car ownership dramatically more affordable for millions and millions of working American families.”
While Trump didn’t disclose details about how the plan would be implemented, tax experts say it would likely provide the most benefits to wealthy Americans while offering little aid to those who need it most — low-income workers.
If the plan mirrored the mortgage interest deduction, car owners would need to itemize their borrowing costs — making it a tax benefit that would mainly help high-income Americans, tax experts said. Ironically, that’s due to Trump’s Tax Cuts & Jobs Act, which greatly expanded the standard deduction starting in 2018, which in turn limited write-offs for millions of low- and middle-income Americans.
Currently, only about 1 in 10 taxpayers itemize, the majority of whom are high-income earners. For instance, more than 60% of people earning over $500,000 itemize, versus 4% of those earning between $30,000 to $50,000, according to the Tax Policy Center.
“If he thought there was a reason to subsidize car loan interest payments, this wouldn’t be the way to help people who need help paying for their car loans,” Leonard Burman, an economist at Urban-Brookings Tax Policy Center, told CBS MoneyWatch. “The people you would want to help are low-income people who need a car to get to a job, and this policy wouldn’t help them at all.”
The Trump campaign didn’t immediately respond to a request for comment.
Higher income, higher benefits
Even if the deduction was above-the-line, or a deduction that reduced a taxpayer’s gross income and didn’t need to be itemized — such as retirement contributions or health savings account deductions — it would still help higher-income Americans more than low-income workers, noted Erica York, senior economist at the Tax Foundation.
“In that case, anyone with auto loan interest could deduct that when they are filing their tax return,” York told CBS MoneyWatch. “The benefit the taxpayer would see depends on what marginal rate they pay on their income.”
For instance, someone in the 10% marginal tax bracket would receive a 10-cent deduction for every $1 in income, while those in the top 37% bracket would get 37 cents deducted on every dollar.
“The higher the tax rate, the higher the benefit,” she noted.
Billions in costs
An auto interest deduction would also come at a large cost to the federal government, likely to the tune of billions each year, tax experts told CBS MoneyWatch. Burman said his back-of-the envelope calculation, based on current interest rates and the size of the auto loan market, is “almost $6 billion per year in income tax reductions.”
At the same time, Trump has proposed multiple other tax reductions in recent weeks, ranging from getting rid of taxes on tipped income to erasing income taxes on Social Security benefits. The cost of footing the bill for all those proposals could cost as much as $9 trillion over the next decade, according to a September 20 analysis from TD Cowen analyst Jaret Seiberg.
Already, the U.S. deficit is projected to hit $1.9 trillion in fiscal year 2024. Trump’s proposals could increase the deficit by $6.9 trillion over the next decade, the Penn Wharton Budget Model told CBS MoneyWatch last month. Proposals from Vice President Kamala Harris, Trump’s rival in the November election, would also add to the deficit, but at a smaller $1.2 trillion over the next decade, according to Penn Wharton.
“We are running enormous public debt, and there is no public policy rationale for exempting car loan interest payments from tax,” Burman noted.
CBS News
Accused mastermind of journalist’s murder wanted by Mexico — but U.S. has called him a “protected witness”
Mexico has asked the United States to extradite the suspected mastermind behind the murder of journalist Javier Valdez after he was arrested on drug charges, the attorney general said.
Damaso Lopez Serrano — who the Justice Department says is known as “Mini Lic” — is accused of ordering the 2017 killing of Valdez, an award-winning journalist and AFP contributor who covered the narcotics trade.
The alleged former high-ranking member of the Sinaloa Cartel was arrested on Friday in Virginia on charges of trafficking fentanyl. Lopez Serrano is the son of Damaso Lopez Nunez, who launched a struggle for control of the cartel following the arrest of its leader, Joaquin “El Chapo” Guzman.
Mexico’s Attorney General Alejandro Gertz described Lopez Serrano as the “mastermind” behind Valdez’s murder.
“We have already prosecuted the rest of the perpetrators and they are in jail,” he told a news conference.
Valdez was shot and killed in his car on May 15, 2017 in the Sinaloa state capital of Culiacan near the offices of his weekly newspaper Riodoce.
Enric Marti / AP
Investigators believe Lopez Serrano ordered the hit because he was angry about information published by Valdez about the Sinaloa Cartel’s internal power struggles.
Mexico has made several extradition requests for Lopez Serrano, who surrendered to U.S. authorities in July 2017 for drug trafficking and cooperated in exchange for a reduced sentence. At the time, the U.S. Drug Enforcement Administration said Lopez Serrano was “believed to be the highest-ranking Mexican cartel leader ever to self-surrender in the United States.”
He was released from prison on parole in 2022.
Gertz said that Mexico had asked “on countless occasions” for Lopez Serrano to be handed over, but Washington declined because he had become a “protected witness” and “was giving them a lot of information.”
He voiced hope that with Lopez Serrano’s latest arrest “there are more than enough reasons” for the United States to finally grant Mexico’s request.
Rebecca Blackwell / AP
Wracked by violence related to drug trafficking, Mexico is one of the world’s most dangerous countries for journalists, news advocacy groups say.
Reporters Without Borders says more than 150 newspeople have been killed in Mexico since 1994 — and 2022 was one of the deadliest years ever for journalists in Mexico, with at least 15 killed.
Media workers are regularly targeted in Mexico, often in direct reprisal for their work covering topics like corruption and the country’s notoriously violent drug traffickers.
Most recently, in October, gunmen killed a journalist whose Facebook news page covered the violent western Mexico state of Michoacan. Then less than 24 hours later, an entertainment reporter in the western city of Colima was killed inside a restaurant she owned.
CHICAGO (CBS) — Two sisters have grateful hearts after they both received heart transplants at the same age—seven years apart.
Younger sister Meredith Everhart and older sister Abbey Cannon are now bonded by a genetic condition and a second chance at life.
“What’s ironic is that when she needed a heart transplant, was exactly the same age I needed a heart transplant,” said Cannon. “Seven years apart in age, seven years apart within 30 days of transplant, and our birthdays are within 30 days.”
The sisters share a special bond of getting a second chance at life, which they both received at the age of 38 years old.
Both sisters suffer from hypertrophic cardiomyopathy—otherwise known as HCM.
The genetic condition is a form of heart disease that causes the heart muscle to thicken.
In 2012, Cannon had chest pain. She was misdiagnosed in Nashville, Tennessee, and got a second opinion at Northwestern Medicine in 2016.
“Within six months, I was inpatient on an aortic balloon pump waiting for a heart,” Cannon said. “I ended up getting my heart 32 days later, So my date is February 27, 2017.”
Just months after Cannon’s transplant, Everhart was diagnosed with HCM too. She tried medication and participated in clinical trials, but her condition kept getting worse.”
“For me, it was, she’s right—I was in denial for a long time,” said Everhart, “and I didn’t want to be sick. I was in my 20s. I was in my early 30’s. I was like, this is not happening. I saw how bad she suffered.”
In May 2022, Everhart got COVID-19, and it sent her into heart failure.
She was added to the transplant list one year later.
“I got the call on January 29 of this year, 2024, and it’s been a journey,” Everhart said. “It’s been fantastic though. Northwestern has been great.”
Cannon said she can’t stress enough how important it is to become an organ donor.
“Had we not had someone that gave that most selfless gift, neither of us would be here,” she said.
CBS News
Congo says mystery disease behind dozens of deaths of women and children finally identified as severe malaria
Johannesburg — For weeks it was dubbed simply “Disease X.” But the mysterious flu-like disease that has killed more than 143 people — mainly women and young children — in the Democratic Republic of Congo has finally been identified.
“The mystery has finally been solved,” Congo’s health ministry declared in a statement on Tuesday. “It’s a case of severe malaria in the form of a respiratory illness.”
The health agency said malnutrition in the hardest-hit region had weakened the local population’s immunity, leaving them more vulnerable to the disease. People who contracted the malaria infection have exhibited symptoms including headache, fever, cough and body ache.
The Congo’s health minister had told journalists the country was on “maximum alert” over the spread of the previously unidentified disease, and health officials told CBS News in early December that the remoteness of the epicenter of the outbreak and lack of a diagnosis made it difficult to launch a concerted response.
Samy Ntumba Shambuyi/AP
At least 592 cases were reported after the alert was first raised by Congo’s health ministry on Oct. 29. The ministry said the disease had a fatality rate of 6.25%. More than half of the deaths recorded were children younger than five who were severely malnourished when they contracted the disease, according to the World Health Organization.
At a press briefing on Dec. 10, WHO Director-General Tedros Adhanom Ghebreyesus said 10 out of 12 samples from patients suffering from the mysterious disease had tested positive for malaria, but he said they were still testing at the time for other diseases.
The Congolese government had sent a rapid intervention team to the Kwango province, 435 miles southeast of capital city Kinshasa, consisting of epidemiologists and other medical experts. Their objective was to identify the disease and mount a suitable response. Government officials had earlier warned locals to avoid touching people infected with the illness or the bodies of those who had died.
Congo has suffered from many disease outbreaks in recent years, including typhoid, malaria and anemia. The country has also grappled with an mpox outbreak, with more than 47,000 suspected cases and over 1,000 suspected deaths from the disease, according to the WHO.
Anti-malaria medicine provided by the WHO was being distributed at local health centers in Congo, and WHO officials said more medical supplies were due to arrive in the country Wednesday.
It’s the rainy season in Congo, which often sees a rise in malaria cases, and will certainly complicate treating those most at risk.
Accused mastermind of journalist’s murder wanted by Mexico — but U.S. has called him a “protected witness”
2 sisters, 7 years apart in age, also receive heart transplants 7 years apart in Chicago
Congo says mystery disease behind dozens of deaths of women and children finally identified as severe malaria
Accused mastermind of journalist’s murder wanted by Mexico — but U.S. has called him a “protected witness”
2 sisters, 7 years apart in age, also receive heart transplants 7 years apart in Chicago