This story in the New York Times raises a few questions as to whether the clear societal benefits of homeownership are outweighed by the opportunity costs of the mortgage interest deduction.
Blatantly cutting and pasting to make my argument –
…77 percent of homeowners said they had at some point voted in local elections, while only 52 percent of renters said they had. About 20 percent of renters knew the name of their representative on the school board; 38 percent of homeowners did. Homeowners went to church more, and invested more in the upkeep of their homes.
These facts, in an of themselves, make homeownership versus renting an easy choice. That said, owning a home is not the right choice for everybody. Everybody has different goals and means. Homeownership can frequently be an excellent vehicle to advance one’s goals. Neither is it the bogeyman that some are making it out to be.
Just had to throw this quote in –
The mortgage interest deduction and other subsidies will cost the government roughly $716 billion in lost taxes over the next five years …
Bah. It’s our money. Leave it to us.
Update: This article in the Washington Post sheds a little bit of light.
I don’t agree with the entire plan towards home mortgage tax deductions, however some changes they are proposing do make sense.
Removing the deduction for second homes, a tighter cap on the deduction, and making it a credit rather than a deduction would permit changes to other parts of the tax system and make it fairer to all.
I think it is fairly normal for home owners to be more politically aware, but this may be a function of age and responsibility as much as anything else. Most young people, regardless of home ownership, are uninterested or feel unaffected by their representatives.
As for the tax status, it is one of the few good tax benefits that the common person has. Most worthwhile tax breaks are available for business owners and persons with a good deal of discretionary income. I say this as a matter of fact and I don’t mean to incite any class warfare silliness.
People who own their own homes have made a conscious decision to stay in the area and therefore are more involved in the community. Not to say that all homeowners are politically active, but property tax decisions and other political actions tend to affect them more directly.
I still think that the FairTax is the best solution to the tax issues.