Housing policy, the worst possible way

The tax code has many bad ideas, idiotic loopholes and senseless provisions, that´s for sure. There are not that many of them that make less sense, however, than the dreadful mortgage interest tax deduction. Matthew O´Brien, at the Atlantic, explains:

The chart below, numbers courtesy of the Tax Policy Center, puts the mortgage-interest deduction into nice pictorial perspective. It shows what percent of the total dollar value of the deduction goes to different income groups (...)

Just for reference, a whopping 75 percent of this 12-figure deduction goes to the top 20 percent of earners. The mortgage interest tax deduction costs the Federal government $100 billion a year, and it goes mainly to pay for bigger houses for the upper-middle class. It is a truly stupid idea, and should be first in line in any meaningful debate about tax reform.

 

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