Home Owmership This High

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


Re:
>
>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



More information about the lbo-talk mailing list