Not just mortgages

Encouraging companies to gear up is barmy. Yet, that’s the effect of allowing interest payments to be deducted from profits before tax bills are calculated. The tax advantage makes borrowing more tempting for companies. That allure has helped bring the world to the brink of crises in leveraged buyouts and commercial real estate. Many companies will go bust and banks will suffer bigger losses – making the recession deeper than it needed to be. The tax deductibility of corporate inter...