Why Does The Government Hate Renters?

As you may know, it's been the American Tenants Association's position to allow residential renters to deduct a portion of rent payments in a fashion similar to that afforded homeowners' mortgage interest payment deductions. Washington Post business page blogger Ezra Klein makes some great points in support of phasing out the home mortgage interest deduction altogether.

Here's what Mr. Klein had to say:

"I'm looking into buying a place myself, and a big part of the incentive is the tax preference: The fact that my mortgage uses pre-tax money while my rent requires post-tax money is a huge difference, particularly over time. And what will boost me into that lush future? Well, the fact that I make a fair amount of money for someone my age. The fact that my grandparents put away a bit of money to help with my eventual down payment. The fact that my earning potential looks likely to rise, which reassures my bank. The government is in effect giving me a cash reward for being pretty well-off.

That's a rather dumb way to apportion resources. More to the point, it's not necessary. The economics and emotional rewards of owning a house are compelling enough without the mortgage deduction. If you want to give low-income homebuyers additional help, that would make a lot of sense, particularly given the long-term importance of assets in bolstering financial security. But giving it to everyone who buys a home of any size is simply a regressive attack on renters. Ripping the deduction out right now would be too disruptive, but you could certainly phase in a cap on future home purchases."

Here's the link to Mr. Klein's blog post:

http://voices.washingtonpost.com/ezra-klein/2009/09/why_does_the_government_hate_r.html?ref=patrick.net