[Chilldoubt]

Interest is payment for a taxable service. You would also pay sales tax on a portion of the interest on the loan.
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good point! how much would that add to consumer's costs...
on a $150000 morgage how much interest is there? i guess that depends on rate - say 8%....that total times 1.2987 is what'll have to come out of pocket -
i need to visit an amortization site... i'll be back

[Your Nightmare]

You wouldn't pay sales tax on the full amount of interest. The amount you would pay tax on is :

the product of--

`(I) the excess (if any) of the rate paid on such debt over the basic interest rate (as defined in section 805); and

`(II) the amount of the debt.

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