The home mortgage interest deduction should eventually be eliminated in the United States

The mortgage interest deduction (MID) has contributed to the growing economic inequality in the US. I see my opponent has decided to attack my sources. However, that’s the thing, economists are all over the board, so who are we to believe? The point is that inequality may be rising, falling, stagnant but there is no real way to know because it depends on the dataset you are using and the sources you are citing. I never said it was falling; only that inequality may be falling. This is not a concession; it is the reality of trying to ascertain causes for complex economic systems that rely on human interactions. Pro, in the last round reiterated her claims that those who make less than $40,000 do not itemize as often and that those making under $40,000 only receive $91 in deductions. I do not disregard these claims; they simply do not show causation. Let me explain, just because it is not common for those under $40,000 to itemize does not mean that the MID is to blame. Those make more and itemize have more to itemize because they SPEND more. Simply by having more money does not mean the MID caused them to have more money. Even without the MID, those making over $75,000 would STILL itemize. Pro’s argument simply does not support that MID causes inequality. If anything, MID is an equalizer as it allows the low-income to itemize when they otherwise would not. Ninety-one dollars might not sound like a lot to you but to the low-income, any support helps. In addition, just so the reader is not confused, Tax Deductions and Tax Refunds are not the same thing – The person making $75,000 is much more likely to PAY and the person making $39,000 is likely to receive a REFUND. The MID does not create an incentive for homeownership. Pro states, “Instead, I argued that this deduction should be eliminated because it provides few or no benefits (e. g. it does not provide an incentive for homeownership); yet, this deduction has several negative consequences. ” Using pro’s statistics, while it is true that 77% of low income individuals wouldn’t be affected by elimination, over 1 in 5 would. Like I have said, for low-income individuals, the MID most likely is the reason that they get to itemize. Moreover, for the 77% that do not benefit now may at some later stage get a house and need that deduction. Pro has not shown why inequality (if it even exists) is bad nor has pro shown any other “negative consequences”. Inequality might be good in that it is incentive to reach for more. It may be that the system needs a certain percentage of the population to be poor in order to function well. Simply saying something is a negative consequence does not make it so. Conclusion:Pro obviously dropped her third contention about MID being one of the largest federal tax expenditures, so I extend my arguments against that. Pro makes a big deal about deductions. However, if you look at the source (Table 1), the figures $91 for under $40,000 and $5,459 for those making $250,000 or more are the tax savings not the tax refund (the amount received). This means the low-income get their taxes reduced by $91. Considering, the average tax burden in the study source year (2004) for those individuals making $40,000 is $5,289, reducing that by $91 is definitely significant. Furthermore, a good portion of that burden will be offset through tax credits, which the person making $250,000 does not get (such as the EIC). There’s simply no good reason put forth for MID’s elimination.