The Accidental Deduction: A History and Critique of the Tax Subsidy for Mortgage Interest
Dennis J. Ventry Jr.
University of California, Davis - School of Law
January 5, 2010
Law & Contempary Problems, Vol. 73, p. 233, Winter 2010
UC Davis Legal Studies Research Paper No. 196
This Article traces the mortgage interest deduction from accident to birthright, from one of many deductible personal interest items to one of the few left standing, and from a nominal tax offset to the second most expensive tax subsidy. It tells the story of how the mortgage interest deduction and other federal housing subsidies fueled the post-World War II surge in rates of homeownership and, more recently, how those programs contributed to the collapse of the housing and financial markets. Finally, the Article offers a eulogy to the mortgage interest deduction that draws on criticisms of the subsidy from two generations of tax reformers and tax policymakers that are more applicable today than at any time during the deduction’s nearly 100-year history.
Number of Pages in PDF File: 67
Date posted: November 3, 2009 ; Last revised: March 18, 2011
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