When it comes to talking about public housing, there’s never a shortage of comments that go something like this: “I don’t want my tax dollars paying for that god-forsaken place where people are just lying around all day, watching TV and smoking dope.”
Well, it turns out, you should be shaking your head and thinking something similar next time you drive by the giant gates of a million-dollar mansion in Winnetka. Because those guys are getting the majority of your money. Data from the Urban Institute show that, of the $131 billion dollars that the federal government loses in the mortgage interest tax deduction, most of it goes to people making the most–the 80th income percentile and above.
Just take a look at that chart at the top. That giant blue line represents those families. The smaller blue lines? That’s the rest of us–benefiting but hardly in comparison to those writing off the interest on their million-dollar second homes.
The National Commission on Fiscal Responsibility and Reform proposed eliminating the mortgage interest tax deduction and replacing it with something that would benefit the rest of us without subsidizing the rich–a 12 percent tax credit for all mortgage interest, with eligible mortgages capped at $500,000 and second homes not eligible at all.
And for those of you keeping track, the amount the government spends on the mortgage interest tax deduction is almost three times what it spent this year for the entire U.S. Department Housing and Urban Development budget. Even if rich people are only benefiting from half the $131 billion in tax deductions for their mansions, that’s still $65 billion to them, compared to $48.5 billion to run all of HUD, including a slice of that for public housing.
So who are the lazy good-for-nothings now?
© Community Renewal Society 2011