GOP Is All Talk, No Action on Tax Reform
The principal problem for tax reform has always been that people want lower tax rates and in theory are willing to give up tax deductions and loopholes to pay for them, but they strenuously resist eliminating any particular tax preference from which they benefit. And the deduction for mortgage interest has long been among the most sacred of sacred cows in this respect.
This was a reasonable assumption at the time. Most people were renters. When they bought a home, they tended to pay cash. Moreover, until World War II very few people paid any federal income taxes: On the eve of war, only 3 percent of the population did. But by the end of the war, 30 percent of the population paid income taxes at rates much higher than today. Consequently, those in the middle class, who previously had given little thought to the value of tax deductions, suddenly wanted them. The mortgage interest deduction was an easy one for them to obtain.
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