Editorial Board
An Indefensible Tax Deduction
The tax deduction for mortgage interest would be a bad idea even if it worked. Which it doesn't.
Do these need a tax break?
Photographer: Justin Sullivan/Getty ImagesIf and when the U.S. Congress ever gets around to giving serious attention to comprehensive tax reform, it ought to reconsider the deduction for mortgage interest. A new study suggests this quirk of the tax code makes even less sense than previously thought.
The U.S. isn't alone in allowing some kind of tax deduction for mortgage interest -- many countries do, though the American version is unusually generous. And the stated reason for this preferential treatment is the same everywhere: It promotes homeownership, which in turn is believed to encourage people to take a bigger stake in their community.