Popular Tax break

[Plane]

http://finance.yahoo.com/real-estate/article/109334/mortgage-deduction-americas-costliest-tax-break?mod=realestate

NEW YORK -- The mortgage-interest deduction is America's favorite tax break -- and it's also the costliest.

Between 2009 and 2013, the government will lose out on nearly $600 billion because of it, according to the Joint Committee on Taxation.




While there's no way to stabilize U.S. debt without making tough choices on the tax and spending sides of the ledger, some sacred cows are more sacred than others. And the mortgage-interest tax break is still deemed untouchable.

Case in point: a new bipartisan tax reform proposal that has been gaining currency in policy circles. Co-sponsored by Sens. Ron Wyden, D-Ore. and Judd Gregg, R-NH, the proposal would simplify the income tax system, streamline the numbers of credits and deductions, and lower the corporate tax rate.

But it doesn't touch the mortgage deduction.


Of those who had mortgages in 2008, roughly 72% claimed the mortgage deduction. But those who benefited most were higher-income households, according to the Joint Committee on Taxation.

Almost half of the returns claiming the deduction were from filers with incomes over $100,000, and roughly 75% in foregone revenue that year went to them.

Meanwhile, 32% of the money went to households with incomes over $200,000, even though they accounted for only 11% of the returns claiming the deduction.

Moreover, since housing is treated more favorably tax-wise than other investments such as stocks, some economists believe the home tax breaks distort people's investment decisions. By making the mortgage deduction less valuable, they argue, that could make the economy more efficient overall.

To correct for all these imbalances,
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I don't like calling it "costly" this implys that the government is the  owner of the money.

[Xavier_Onassis]

It is costly to the government, and costly to those who are not buying houses, because they must pay more so homeowners can pay less.It encourages people to buy homes they could not otherwise afford, and causes more expensive homes to be built than affordable ones.

[Plane]

It is costly to the government, and costly to those who are not buying houses, because they must pay more so homeowners can pay less.It encourages people to buy homes they could not otherwise afford, and causes more expensive homes to be built than affordable ones.

 The US government has decided a long time ago that encourageing home ownership was worth doing.

   But it is wrong to say that money left where it originates is a cost to someone who fails to take it away.

    The Government taps some money from the public every time the money moves , if they leave some in circulation then they can tap it later on the next time it passes.

    It is like fish in the lake , if you fish the lake very hard you might get less fish than you would from fishing moderately.