Who Cares About Mortgage Interest Deductibility?
Martin Gervais () and
Canadian Public Policy, 2008, vol. 34, issue 1, pages 1-24
We use the US Survey of Consumer Finances to measure the change in federal tax liability that would result should mortgage interest no longer be deductible from taxable income. We argue that the elimination of this housing tax provision would lead households to reshuffle their balance sheet, thereby lowering the amount of interest income taxes collected. We find that the cost of this tax provision is between 36 and 66 percent of the estimates produced by the US Office of Management and Budget, depending on the types of assets one assumes would be used to lower mortgage debt following the removal of the provision. Furthermore, since mostly rich households would be in a position to reshuffle their balance sheet following such a change in tax policy, the distributional effects of this program are much smaller than conventionally believed. While the focus of this paper is on the elimination of mortage interest deductibility in the US, the results of this study shed some light on the impact and distributional consequences to expect should mortgage interest deductibility be introduced in Canada.
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (8) Track citations by RSS feed
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Working Paper: Who Cares about Mortgage Interest Deductibility? (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:cpp:issued:v:34:y:2008:i:1:p:1-24
Ordering information: This journal article can be ordered from
Access Statistics for this article
Canadian Public Policy is currently edited by Herb Emery
More articles in Canadian Public Policy from University of Toronto Press University of Toronto Press Journals Division 5201 Dufferin Street Toronto, Ontario, Canada M3H 5T8.
Series data maintained by Prof. Werner Antweiler ().