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Originally Posted by satz  There have been a number of threads here in the recent past decrying the evils of debt, and I think we would all agree that the bible certainly presents debt as an undesirable thing.
However, if my understanding is correct, under our modern western tax regimes the interest payments on debt are tax deductible, so that sometimes it is actually beneficial for a person to have some debt as opposed to none.
Now this sort of financing is normally associated with large corporations, but from what I understand, individuals can use it as well, particularly when purchasing property.
Firstly, do these arrangements really provide the overall benefit they are supposed to?
Secondly, how should we look at them in light of the bible's teaching about debt?
p.s just for completeness, I do not believe the bible condemns all debt as sinful. |
Irrespective of the tax jurisdiction, I think people generally exaggerate the economic benefits of tax deductions, and it compels them to irrational economic behavior rationalized from the perception that it saves them money. Tax deductions only drop the adjusted gross income for tax purposes, so it basically means interest on debt where tax-deductible is 25-35% less than it actually is, when the deduction is claimed. That's it. It doesn't mean one should go borrow oneself into oblivion or buy expensive vehicles, because of a perceived tax benefit.
I think the pravailing tax structures and debt-based monetary systems are horribly inefficient, detrimental to economic growth which could be greater, and would otherwise allow for a broader, more affluent middle class and greater economic prosperity for the masses if we had a sound monetary system. Hopefully, by the 22nd or 23rd century, we will eventually work out the kinks and inefficiencies of the status quo. The political fetish for centralized unitary states and central banks will eventually wither.