GOP senator's new tax proposal could save Americans big money on crucial loan: 'Proud to lead the way'

A new proposal would allow people to write off auto loan interest paid on their taxes.

The "United States Automobile Consumer Assistance and Relief Act (USA CAR Act)" would allow people to make the deduction if the car was built in the United States, according to Sen. Bernie Moreno, R-Ohio, the bill’s sponsor.

"For decades, the American auto sector has been devastated by bad trade deals and bad leaders, who shipped American manufacturing jobs overseas while flooding our market with cheap foreign cars," Moreno said in a statement on Tuesday.

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"Thanks to President Trump, we are finally ensuring every car sold in America is made in America and that working Americans can actually afford to buy a car in the first place. I’m proud to lead the way in the Senate," he continued.

Other types of borrowing, such as student loans, are able to have their interest deducted from federal taxes. If passed into law, the legislation would codify what Trump suggested on the 2024 campaign trail.

"I will make interest on car loans fully tax deductible," Trump said at a North Carolina rally in October during the closing days of the election, according to Reuters.

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"I am only going to do it if they build that particular product – namely an automobile – in the United States," he added, the outlet reported.

As the Tax Cuts and Jobs Act of 2017 is set to expire this year, chatter about the future of American tax policy has made waves through Washington, especially since Trump has also proposed eliminating taxes on tips as well as overtime pay.

Moreno was elected to the U.S. Senate in November, and had previously operated car dealerships in Ohio.

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The auto industry is in the spotlight this week as the president is set to make his "Liberation Day" tariff announcement on Wednesday afternoon, which is likely to have a major impact on manufacturing. While opponents have raised concerns about the impact it will have on car parts, those in favor of tariffs argue that it is a catalyst to return jobs to the U.S.

Various automakers, like Hyundai Motor Company, have announced that they will be moving some of their production lines and investment into the U.S., citing skirting around potential tariffs as one of the reasons. There is a 25% tariff expected for cars and parts that are made outside the country, according to the White House. 

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"America is for us the largest market, and we then decided to make the largest investment in the world with this $12.6 billion," he said. "There is nothing better to address potential tariffs than localizing our production in America, bringing jobs."Hyundai CEO Jose Munoz said last month on "The Claman Countdown" about their planned $21 billion domestic investment.