President Donald Trump and his MAGA loyalists continue to insist that Democratic complaints about "affordability" are a "hoax," but that argument isn't helping his approval ratings — which remain low in poll after poll. And Democratic strategists, after double-digit victories in gubernatorial races in New Jersey and Virginia in November, are feeling more optimistic about the 2026 midterms.
Trump has a new talking point going into 2026: saying that Republicans are excluding car loan interest from taxes. But according to the New York Times' Adam Sella, the benefits may not go to lower-income Americans.
"As President Trump and his Republican allies scramble to address affordability concerns," Sella explains in an article published on Christmas Day 2025, "they have touted the giant tax-cut bill that was signed into law this summer. Mr. Trump and his advisers have promised Americans that they will see bigger tax refunds next year, in part because of new tax breaks that were included in the bill. One of those — a deduction that the law calls 'no tax on car loan interest' — is likely to be popular. But it may yield only marginal savings for consumers."
Sella continues, "The deduction has its origins in a campaign pledge that Mr. Trump made in October 2024 to stimulate the domestic auto industry and make cars more affordable. Mr. Trump's domestic policy bill, which he signed in July, has enacted the deduction. But tax and auto experts are uncertain about whether the policy will be a boon to the auto industry or will deliver on affordability."
Sella notes that like Trump's "no taxes on tips and overtime" promises, his "auto loan interest deduction" is most likely to help "upper-middle-class Americans."
Sarah Austin, a senior analyst at the Institute on Taxation and Economic Policy, points out that low-income households mostly buy used cars.
Austin told the Times, "If you want to say that this is about affordability and improving affordability of cars, then it makes it really hard to feel like you've done your job well if most of the market is out of reach of this deduction and not actually able to use it."
Read Adam Sella's full New York Times article at this link (subscription required).
