11/6/10

Cool Chart about a Regressive Tax Deduction!

If you read that title and clicked through, then you probably think (1) charts in general are pretty cool and you're some kind of chart-loving maniac who fetishizes pictorial representation of data and, like an avid bird watcher, need to see this cool chart to check it off in your big book of charts you've seen in the wild (of the internet) or (2) that regressive tax deductions are stupid and any graphical representation of that fact will make you even more sure of your completely substantiated view. In any case, via Mike Konczal from the Urban-Brookings TPC's  How to Better Encourage Homeownership:

Some context:
Your gut reaction is probably that the home mortgage interest deduction and other housing subsidies go primarily to lower income people purchasing cheaper homes, people on the margin between owning a home and not owning a home. That’s the exact opposite of what really happens. Research has found that the tax deduction does little to increase home ownership. Other research has found that the tax savings for households earning more than $250,000 is 10 times the tax savings for households earning between $40,000 and $75,000 a year.
...
The businesses who benefit the most from this system are those in the business of building high-end custom single-family detached homes. And the homeowners who benefit the most from this system are, well, probably not you. Keep this in mind as the Deficit Commission might end up doing a good thing and recommend removing highly regressive giveaway of the home mortgage interest deduction.
The real American dream isn't home ownership- it's becoming super-wealthy so the costs of your home ownership are completely distorted by a ridiculous tax code. USA! USA!

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