One used to be able to deduct any interest, not just mortgage interest. There was a sweetheart deal for oil production, to the point that 50s Hollywood actors would form corporations that mixed film production with oil business. Capital gains were quasi indexed to inflation in that your first 50% wasn’t subject to gains taxes.
The whole point of the changes in 86 (aka Reagan tax cuts) was to remove all those deductions/loopholes/shelters in return for a lower nameplate rate. The goal was to clear out bullshit stuff people were doing for tax reasons and replace it with useful economic activity.