The mortgage interest tax deduction is one of the least popular policies among economists because it fails in its objectives. It made homes less affordable and raises prices, and enriches banks, without helping new homeowners.
The concept of imputed income also helps homeowners. If you own a house that you rent out to people, the money you get is counted as income. If you are an owner-occupier and paid off your mortgage, then you effectively pay rent to yourself... money that you otherwise would've needed to pay to others, but don't need to pay tax on it.
So essentially you get a deduction even besides the mortgage interest deduction. All of this is also factored into home values, and thus the purchase decision for new buyers won't ever be dramatically better than renting.
The solution of a land value tax is necessary. It is most necessary in the residential space, including for first homes, because that is the most important place where we need to ensure high and quality supply, and affordability.
Helping homeowners, specifically, but not others is arbitrary and unfair.
Providing a citizen's dividend out of the revenue of a land value tax, to help all, would be fair, and would help enable people to acquire homes if they want them.
>The concept of imputed income also helps homeowners. If you own a house that you rent out to people, the money you get is counted as income. If you are an owner-occupier and paid off your mortgage, then you effectively pay rent to yourself... money that you otherwise would've needed to pay to others, but don't need to pay tax on it.
Imputed income is everywhere, are you suggesting it should all be taxed? When you prepare a meal in your kitchen instead of paying for it in a restaurant, you effectively pay chef's wages to yourself, "money that you otherwise would've needed to pay to others, but don't need to pay tax on it." Another reason why singling out homeowners on imputed rent is fallacious is that if the imputed rent were to be taxable, then the cost of maintaining and improving the home would be deductible, just like it is for landlords, and there would be no caps on mortgage or real estate tax deductions related to acquiring or improving the property, just like for landlords.
You get an income tax deduction for real property taxes paid on all the property you own, whether for business or personal use. (Although there is a temporary cap on the total amount of state and local taxes on personal-use property one can deduct on their federal tax return, along with a workaround for wealthy business owners, the so-called pass-through entity elective tax that many states have enacted.)
The concept of imputed income also helps homeowners. If you own a house that you rent out to people, the money you get is counted as income. If you are an owner-occupier and paid off your mortgage, then you effectively pay rent to yourself... money that you otherwise would've needed to pay to others, but don't need to pay tax on it.
So essentially you get a deduction even besides the mortgage interest deduction. All of this is also factored into home values, and thus the purchase decision for new buyers won't ever be dramatically better than renting.
The solution of a land value tax is necessary. It is most necessary in the residential space, including for first homes, because that is the most important place where we need to ensure high and quality supply, and affordability.
Helping homeowners, specifically, but not others is arbitrary and unfair.
Providing a citizen's dividend out of the revenue of a land value tax, to help all, would be fair, and would help enable people to acquire homes if they want them.