Bill Roper (billroper) wrote,
Bill Roper
billroper

That Mortgage Interest Deduction

I keep hearing people say that the mortgage interest deduction subsidizes home owners. While that's no doubt true in one sense, it seems to me that it simply levels the playing field between home owners and renters.

If the Joe Corporation buys a house for rental purposes and takes out a loan to finance the purchase, JoeCorp gets to deduct the interest. If the interest is deductible on a rental property, why shouldn't it be deductible when you're buying your home?

In my heretical moments, I think that all consumer interest should be deductible. There's an economic stimulus that would hit a lot of people who need it the most.

The place where home owners clearly do receive a tax subsidy is with the capital gains exclusion on the sale of a home. Of course, some of those gains aren't real (especially now) -- they're simply inflationary gains over 30 years. You can also make a strong argument that all taxes on capital gains index the underlying asset to inflation.

But that's yet another discussion.
Tags: home, musings, politics, taxes
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  • Well, That Escalated Quickly

    Today could have been better. Much better.

  • The More You Know

    The problem with getting older is that -- although you may know more than you did when you were younger -- it seems like there are more and more…

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    I checked tonight and I do indeed have two more months to pay my property tax without incurring late fees. So I guess I'll be paying that later. The…