> the deduction began as an unplanned technicality. When the federal government first levied income taxes in 1913, Congress allowed Americans to deduct from their taxes the cost of all interest payments. This is standard policy for corporations: the government only wants to tax profits—not money spent on loans for tractors or a new office. In 1913, the government allowed deductions on all interest—probably because all interest payments were business-related. No one took out car loans in 1913 or paid interest on credit card debt, and the majority of mortgages were for farms.
https://priceonomics.com/the-case-against-everyones-favorite...
http://www.taxpolicycenter.org/model-estimates/individual-in...
For someone earning $500,000 a year, a $5,000 tax break is a $5,000 tax break, it isn't going to do much of anything to their behavior.
Considering that mortgages usually require a down payment, you could also make the argument that the benefit overwhelmingly accrues to the financially stable. People that can't get the down payment together aren't going to be stabilized by a benefit they can't access.
I'm very sensitive to this at the moment, because "wealthy" is used as a term when people talk about CA income taxes, which can be frustrating since in reality, much of the wealth in California is enormously under taxed (thanks to Prop 13), which basically amounts to the continuing siphoning of wealth from the young to the old.
Just got my tax bill and I see I'm paying a percentage of my home value for things like school districts, etc.
Why I as a relatively new resident who has not benefited from these services yet is paying a disproportionate percentage of the taxes by a massive amount compared to people who have benefited from these services for decades while paying a pittance due to their locked prop 13 tax rates is beyond infuriating.
Doubly so when those long time owners have captured absolutely massive value through collecting rents and massive asset appreciation.
I'm all for paying my fair share for services in my community. This is not my fair share. At the very least it should be equal if not based on how long people have lived there.