Karl W. Smith, Columnist

Eliminate the Mortgage Interest Deduction

Not only does it cost the government revenue, but fewer homeowners are actually taking it.

August 9, 2019 at 10:30 AM UTC

Karl W. Smith is a Bloomberg Opinion columnist. Previously, he was vice president for federal policy at the Tax Foundation and assistant professor of economics at the University of North Carolina.

Do all those mortgages really deserve their deductions?
Photographer: Drew Angerer/Getty Images North America

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Economists have long hated the mortgage interest deduction, but U.S. politicians have long considered it untouchable. Then, in 2017 — after much wrangling and over the objections of several suburban members of Congress — Republicans capped the deduction as part of the Tax Cut and Jobs Act.

Now there is some new evidence on the effects of that law — and the case for entirely eliminating the mortgage interest deduction just got a little stronger. Not only would its elimination free up revenue for other priorities and simplify the tax code, it is unlikely to have a negative effect on homeowners.