From enrique at anise.ee.cornell.edu Thu May 27 15:55:52 1999
Top quintile, roughly speaking.
I think you're exaggerating. As your income goes up, your ability to get a bigger mortgage (and thus your ability to capture the tax advantage) goes up; but your other possible deductions go up as well, often in tandem: state taxes, for instance.
Anyway, the 'standard deduction' is rigged to *help* low-wage earners in two ways: one, to get a more progressive AGI than would normally be able, given the byzantine deduction rules. Also it hlep by making the forms easier to fill out :)
It's tough to tell exactly from the numbers the IRS publishes, but for those with AGI in the $15k->$17k range, the average exemption plus deductions is around $10.4k ... given a few kids in that average family, I suppose it could be argued that it's dominated by the standard deduction, but the $30k->$40k AGI range averages about $13k of exemptions and deductions, so I think it's a little weak to claim that only top quintile taxpayers are getting a tax advantage from a mortgage.
2/3 of households are homeowners, so I can't imagine it being that extreme: if by top quintile you mean the 20% of 1040 filers who have AGIs above $50k, I think you're mistaken.
/jordan