The deduction grossly distorts the market and our country’s fundamental investments, thus productivity. There’s got to be an offsetting drop in tax rate to right the problem, however.
But as an investor, I don't understand it
As a homeowner since 1974 I've always had a mortgage deduction. That let me keep more of my own money to spend on housing. In this case, home ownership.
It was always thought that the “cost to govt” of encouraging home ownership strengthened communities and our society and gave everyone a goal they could reach on the first step of the ladder of owning their own family home.
Not to mention the jobs that are created by a strong real estate market.
So please explain to me how choosing to live in a rental property owned by someone else, or a smaller house, will really be “cheaper” and this will lead to ordinary working folks having extra money to put into “productive” investment?
In what? Stocks? Govt bonds? Corporate bonds? Interest earning savings accounts? CD’s? How's that working out for folks these days? What kind of jobs will that produce for an “investment” economy, to replace the model of property ownership invested in by tens of millions of individuals?