Trump Promises Tax Deduction for Car Loan Interest, Incentives for Auto Industry

DETROIT—Former President Donald Trump announced new tax incentives aimed at revitalizing auto manufacturing, including new credits for research and development, expanded claims of equipment costs for small businesses, and consumer tax deductions for car loan interest, as a presidential campaign promise.

The incentives are in addition to Trump’s previous promises to manufacturers, which include a lower corporate tax rate for U.S.-based manufacturers, increased tariffs on imported automobiles, and increased domestic energy production, which is intended to attract manufacturers to U.S. soil.

The announcement was made at a gathering of some 500 business leaders at the Detroit Economic Club on Oct. 10.

The intense focus on domestic manufacturing and automaking demonstrates the importance of Michigan’s 15 electoral votes to the Trump campaign in the 2024 presidential race.

Trump trails Democratic presidential nominee Vice President Kamala Harris by just 1 percentage point in an average of recent Michigan polls, one of seven battleground states likely to decide the election.

The Republican candidate said the series of new tax incentives for auto manufacturers would promote the building of large, modern auto plants and help make the United States an industrial superpower.

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10/10/2024

Those incentives include expanded tax credits for research and development, a 100 percent tax write-off for heavy equipment in the first year after purchase, and full expensing for new manufacturing investments.

“I intend for the triumph of the American Auto Industry to be among my greatest legacies,” Trump said.

For small businesses, Trump announced a doubling of the amount they can deduct for equipment purchases from $500,000 to $1 million.

For consumers, Trump announced that interest on car loans would be fully tax-deductible, similar to the interest on home loans.

Trump had previously announced that he would incentivize manufacturers to produce goods in the United States by offering a 15 percent corporate tax rate for companies that make their products stateside, down from the current rate of 21 percent, and imposing a 100 percent tariff on imported automobiles.

The former president has also promised to reduce the price of gasoline by 50 percent within one year of taking office by increasing domestic oil production and doubling the production of electricity, which he said would further attract manufacturers.

Vice President Kamala Harris has also wooed auto workers and manufacturers.

“We announced the opening of more than 20 new auto plants in the United States, and we did it by investing in American industry and American workers.”

Harris said she would continue to invest in communities like Flint, a city with a long history of automaking, but did not mention specifics.

New Protections

Trump also promised increased protections for industries deemed critical to the national interest, including steel and the auto industry.

A key element of those protections is the imposition of increased tariffs, a move that Harris has repeatedly called a tax on the American people.

“I want tariffs, but there has to be reciprocity,” Trump said, meaning an equal trade footing between the United States and other countries.

“Without that tariff, every single one of the Detroit Big Three could right now be out of business,” Trump said on Oct. 3.

Speaking of Chinese automakers who are locating plants in Mexico in an apparent attempt to sell electric vehicles in the United States, Trump said: “I will impose whatever tariffs are required … 100 percent, 200 percent, whatever is necessary.”

The U.S. goods trade deficit with Mexico totaled $130.5 billion in 2022, a 23.7 percent increase from 2021, according to the Office of the U.S. Trade Representative.

Trump won the state by fewer than 10,000 votes in 2016. Then-presidential candidate Joe Biden carried Michigan by about 154,000 votes in 2020.

“Neither candidate has won Michigan yet,” Rep. Debbie Dingell (D-Mich.) told The Epoch Times.

“I think this is a purple state. I think it’s competitive. It’s coming down to Pennsylvania and Michigan.

Dingell, a board member of the Detroit Economic Club, said she attended Trump’s speech in an effort to bring civility back to politics.

Both candidates have campaigned heavily in Michigan on the economy, and some attendees listed that as their top concern in this election.

“The economy and prices,” Nabby Yono, 74, of West Bloomfield, told The Epoch Times.

“Inflation,” Kenny Logan, 29, of Detroit, said.

“It’s the cost of living,” Leo Terzo, 29, of Detroit, said. “And uncertain markets and interest rates.”

Some attendees were more concerned about other issues.

For Arin Steinhauser, the lack of civility in politics looms larger than economic issues.

“You can’t get anything done if you can’t work together,” Steinhauser, 40, of Detroit, told The Epoch Times.

“My No. 1 issue is definitely the open borders. Zero safety. No one feels safe anymore,” Sofija Sinishtaj, 41, of Troy, Mich., told The Epoch Times.

Beyond the business community, some Michiganders expressed more frustration with politics than interest in the election.

“I must have gotten a pound of mail from the campaigns in the last month,” Patricia Burlock, 62, of Harrison Township, told The Epoch Times.

Frustrated by the negative messaging, Burlock said: “I don’t think I’m going to vote this year.”

Sam, 51, of Detroit, who declined to give his last name, lamented that moderates seem to have no place in the current political landscape.

“I would love, for some really strong, moderate third party to rise out of the ashes. But I just don’t think our current system will ever allow that to happen,” he told The Epoch Times.

“Unfortunately, some of the insanity that’s going on forces you to make votes that are maybe against your principles but for the safety and sanctity of the country,” Steinhauser said.

“It’s a difficult decision to be made.”