Reason.com - Free Minds and Free Markets
Reason logo Reason logo
  • Latest
  • Magazine
    • Current Issue
    • Archives
    • Subscribe
    • Crossword
  • Video
    • Reason TV
    • The Reason Roundtable
    • Just Asking Questions
    • Free Media
    • The Reason Interview
  • Podcasts
    • All Shows
    • The Reason Roundtable
    • The Reason Interview With Nick Gillespie
    • The Soho Forum Debates
    • Just Asking Questions
  • Volokh
  • Newsletters
  • Donate
    • Donate Online
    • Donate Crypto
    • Ways To Give To Reason Foundation
    • Torchbearer Society
    • Planned Giving
  • Subscribe
    • Reason Plus Subscription
    • Gift Subscriptions
    • Print Subscription
    • Subscriber Support

Login Form

Create new account
Forgot password

Politics

Study: Upper Class Entitlement Helps Upper Class Most

Matt Welch | 3.24.2014 7:29 AM

Share on FacebookShare on XShare on RedditShare by emailPrint friendly versionCopy page URL
Media Contact & Reprint Requests

The Wall Street Journal has a write-up of a new study by the R Street Institute that looks at how the mortgage-interest deduction is taken zip code by zip code. Conclusion?

tax preferences, particularly the mortgage-interest deduction, have helped drive up the size of houses by as much as 18% in the nation's most affluent areas while not broadly encouraging people to buy homes. […]

the government's tax subsidies for housing "don't encourage homeownership in any meaningful way. People just end up buying larger homes," said Andrew Hanson, an associate professor of economics at Marquette University who conducted the study along with two other economists.

Reason's Anthony Randazzo and Dean Stansel were on this story 28 months ago, in a piece titled "The Upper-Class Entitlement: It's time to end the mortgage interest deduction." From that:

This longstanding incentive, which allows individual taxpayers to deduct up to $1.1 million in home loan–related interest payments from their taxable income, has warped the real estate market and overwhelmingly benefited higher-income Americans, all while failing to achieve its stated policy objection of promoting homeownership. […]

If [the] $1.2 trillion in itemized deductions was instead spread throughout the tax base, the average tax rate could be reduced by roughly a fifth, from 17.8 percent of taxable income to 14.5 percent. Such a tax cut would directly increase the reward for productive, income-generating activity. Closing loopholes such as the mortgage interest deduction while lowering overall rates would lead to a more productive economy.

Link via the Twitter feed of Neil King.

Start your day with Reason. Get a daily brief of the most important stories and trends every weekday morning when you subscribe to Reason Roundup.

This field is for validation purposes and should be left unchanged.

NEXT: Steve Chapman on Obama's Overtime Gambit

Matt Welch is an editor at large at Reason.

PoliticsPolicyEconomicsHousing PolicyTaxes
Share on FacebookShare on XShare on RedditShare by emailPrint friendly versionCopy page URL
Media Contact & Reprint Requests

Show Comments (36)

Latest

Rep. Chip Roy on Spending, Immigration, and the American Dream

Nick Gillespie | From the November 2025 issue

Brickbat: Wrong Way

Charles Oliver | 10.9.2025 4:00 AM

The Constitution Does Not Allow the President To Unilaterally Blow Suspected Drug Smugglers to Smithereens

Rand Paul | 10.8.2025 5:54 PM

States Are Banning Retail Sales of Dogs and Cats. It's Doing More Harm Than Good.

John Stossel | 10.8.2025 2:50 PM

Supreme Court Declines To Address Section 230 in Two Cases for This Term

Joe Lancaster | 10.8.2025 2:30 PM

Recommended

  • About
  • Browse Topics
  • Events
  • Staff
  • Jobs
  • Donate
  • Advertise
  • Subscribe
  • Contact
  • Media
  • Shop
  • Amazon
Reason Facebook@reason on XReason InstagramReason TikTokReason YoutubeApple PodcastsReason on FlipboardReason RSS

© 2025 Reason Foundation | Accessibility | Privacy Policy | Terms Of Use

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Take Reason's short survey for a chance to win $300
Take Reason's short survey for a chance to win $300
Take Reason's short survey for a chance to win $300