I keep finding very poor or misleading reporting on housing in the US. Some of this is sloppy or lazy reportage; others reflect reporters being suckered by Think Tank spin and political narratives.
Lately, the area seems to be misreported the most is the coverage of the mortgage interest deduction. The misleading impression created by some reports is that this deduction is the result of a specific policy designed to encourage home ownership. That is a false narrative, belied by history of theFederal income tax.
Let’s take a quick look at facts so that people understand it better.
The first Federal income tax in the US was passed in 1894, and subsequently struck down by the Supreme Court. This led to the passage of the Sixteenth Amendment (ratified in 1913), that empowered Congress “to lay and collect taxes on incomes, from whatever source derived.”
With this new power, Congress imposed the first taxes. Rates started at 1%, and rose to a whopping 7% for taxpayers with income in excess of $500,000. This applied to relatively few people, with less than 1% of the US population paying any income tax.