How about a tax credit (reduction) for debt reduction?

[ThomWV]

To the extent possibly now and greater later when we are better situated I think it would be a good idea to reward debt reduction. Democrats and Republicans alike respect thrift and while debt reduction does not create jobs* it is still desirable. So I suggest this, a personal tax credit for debt reduction. Add up your total debt last year, subtract your total debt this year and if debt went down then you could reduce your taxable income by the amount or some multiple of it. In effect reduce your tax. I realize that in these hard times this is a trifling matter and of course those in better financial shape would be best able to take advantage of it. But over time I think its in the best interest of us all if collectively we hold less debt and this seem to me to be one approach to reducing the debt we already have. What do you think?

* Possibly just the opposite in fact, money spent paying down bills is not buying new things that require new work to create.

[terisan]

1. I think it is a godd idea. nt

[wartrace]

2. Very hard to verify & doesn't do anything for a LOT of people.

I could say I owed my uncle Harry 15,000 dollars & I paid him off. Uncle Harry, being the kind of guy he is would agree to this scheme.
A LOT of people sunk deeper into debt trying to survive, they would not be eligible. A few people have shunned debt their entire lives & lived well below their means. They have made a continuing sacrifice and have done without. These people are also hurting in this downturn.

The fairest way to "stimulate" the economy or at LEAST compensate the taxpayers for the damage done by Bush & co is a flat cash payment to everyone.

[Johonny]

3. I agree

And yet don't have a problem with this idea. I have no doubt. This does nothing for me. I guess it's not a big deal. I'm not sure it's that hard to verify. I imagine forms with your personal debt owed aren't hard to come by. They would certainly be required to take the tax credit. The main problem is, I doubt a minor tax credit for turning your finances around is likely to motivate many people to turn their finances around. It's probably a token gesture that will end up as yet one more loophole used by the rich but not actually used by the targeted group.

[wartrace]

5. True enough. I don't think many people LIKE being in debt.

If it were possible to get out of debt they are going to do it anyways.

[Bill McBlueState]

4. there's a deduction for interest paid on student loans

Extending this to all forms of debt would be a nice start.

[Hello_Kitty]

6. You used to be able to write off credit card debt.

Reagan ended it.

[ThomWV]

7. Deductions for interest paid encourages debt - just the opposite of what I want.

Dtudent loans or any other kind of loans.