The Accidental Deduction: A History and Critique of the Tax Subsidy for Mortgage Interest

Law & Contempary Problems, Vol. 73, p. 233, Winter 2010

UC Davis Legal Studies Research Paper No. 196

67 Pages Posted: 3 Nov 2009 Last revised: 18 Mar 2011

Dennis J. Ventry Jr.

University of California, Davis - School of Law

Date Written: January 5, 2010

Abstract

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.

Suggested Citation

Ventry, Dennis J., The Accidental Deduction: A History and Critique of the Tax Subsidy for Mortgage Interest (January 5, 2010). Law & Contempary Problems, Vol. 73, p. 233, Winter 2010; UC Davis Legal Studies Research Paper No. 196. Available at SSRN: https://ssrn.com/abstract=1498784

Dennis J. Ventry Jr. (Contact Author)

University of California, Davis - School of Law ( email )

UC Davis School of Law
400 Mrak Hall Drive
Davis, CA 95616-5201
United States
530-752-4566 (Phone)

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