Dennis J. Ventry, Jr., University of California Davis School of Law, has posted
The Accidental Deduction: A History and Critique of the Tax Subsidy for Mortgage Interest, which is forthcoming in
Law and Contemporary Problems 72 (2010). Here is the 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.
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