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View Diary: Robert Reich Gets It Right (171 comments)

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  •  I don't think 'subsidizing' means what you (0+ / 0-)

    think it does. The definition of 'subsidy' isn't "no tax'.

    •  It's a subsidy (0+ / 0-)

      Renters pay higher taxes than owners who are paying interest on a mortgage.  The government has to account for the cost of the deduction.  This deduction, like all deductions, is a "tax expenditure."  Even the government considers it spending.  The higher taxes paid by renters are going, at least in part, toward that tax expenditure.  That is, the renters are subsidizing (by their higher taxes) the owners (who have a smaller tax liability).  More cash is leaving the pockets of renters, and more cash is staying in the pockets of owners.  

      That's a subsidy.  A 90 billion dollar a year subsidy (that's more than we spend on the Department of Education).  

      While finding the cost, here's another interesting bit on that:  "First, the home mortgage interest deduction flows mostly to the top half of the income distribution –the people who can afford to pay the mortgage, taxes, insurance and maintenance on a home. Households earning over $200,000 a year capture about a third of the $90 billion in tax benefits. Those earning between $100,000 and $200,000 captured another 42 percent of the benefits.

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