Sunday, September 07, 2014

Mortgage deduction most helpful to the rich

A Facebook post from economist Robert Reich.

We could also scrap the mortgage deduction and lower tax rates for lower and middle income people. That would make doing taxes easier.

https://www.facebook.com/RBReich/posts/858867334125864



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A new report shows the percentage of Americans renting their homes, rather than owning them, continues to rise. But renters, who on average have lower incomes than owners, get a lousy deal. Homeowners can deduct mortgage interest – a subsidy worth over $70 billion a year to them. Wealthy homeowners with huge mortgages and high tax brackets get giant deductions. Homeowners earning more than $200,000 a year get almost $2,000 annually off their taxes, on average, while homeowners earning $65,000 a year get less than $200, and renters get nothing. As Congress contemplates tax reform, here’s a better idea: Cap the mortgage interest deduction and use the savings to allow renters to deduct rental payments. What do you think?

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