Home Owmership This High

Brad De Long delong at econ.Berkeley.EDU
Fri Oct 23 07:48:43 PDT 1998

>What really amazed me after I got the house was how much you get by buying.
>A lot more habitat for the money, plus the homeowners insurance seems like
>a luxery.
>And of course the tax deduction every one raves about, but I think most
>low-income people get no benefit from this.

I remember (I may be wrong about this) that effectively no household making less than $35,000 a year pays enough in taxes for the home-mortgage deduction to be worth anything to them. It's a program for $80,000 a year households paying $1500 a month mortgages and saving $4000 a year in taxes as a result.

Of course Max (and I) would say that mortgage interest payments paid by apartment-owning landlords are deductible as business expenses, and are largely passed-through to tenants, so that tenants benefit from the mortgage interest deduction too...

But even so *this* portion of the tax code is appallingly regressive, yet--because every elite journalist benefits from it massively--any attempt to scale it back meets with immediate loud media howls... (Not that either political party cares about making the tax code more progressive these days...)

Brad DeLong

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