Mortgage interest deduction perverted tax policy?

Question

I figure the mortage interest deduction benefits finance people who know about it since they work with the tax code all the time. In addtion, the benefits are shewed toward wealthy households, yet interest deductions on mortages offset local property taxes going up faster than wages even for the wealthy. Yet, doesnt this form of tax shifting lead to perserve incentives on both sides of goverment at local, and federal level.

Answer 1

The mortgage interest deduction is an example of congress using the tax code to influence social policy. Congress is in favor of home ownership, so they allow taxpayers to deduct mortgage interest and real estate taxes as an incentive for people to purchase homes. It's really that simple. Without the tax incentives, people would still own homes, but maybe not in as large of numbers. I've owned my home for the past 9 years, but due to the increases in the standard deduction, I don't use the mortgage interest deduction... but I'm still happy to be a homeowner.

Answer 2

actually the deduction benefits ALL home owners, poor or wealthy, it actually helps people buy homes..the federal tax deductions are pretty good because you dont pay taxes on mortgage interest, property taxes and most state taxes...in the state of arkansas, u pay taxes on the federal taxes you pay, how sorry is that...i suggest you take a tax course and learn a little bit more about the tax system and see that excess taxes are regressive and less tax is progressive

Answer 3

No, it creates incentive to invest in real estate. this is actually good for the government and the citizen. that's a pretty rare combination.

Answer 4

you've never owned a home before have you.....moron. the tax benefits benefit everyone regardless of income level.