> Subject: [PEN-L:11492] Re: Home Mortgage Deduction
Robin said:
<<Interesting observation that the home mortgage interest deduction
is an anti-environmental subsidy. One reads so much about the
anti-environ- mental subsidies of the Brazilian government regarding
settlement in the rain forest, I wonder why the same commentators
never talk about one of our own favorite ways to induce ourselves to
misuse the environment.>>
It's not just the MI deduction, but also that for property tax,
plus highway subsidies, plus under-taxation (from a social-
cost standpoint) of fossil fuel and autos, plus diluted political
power of cities in state-government context.
Louis said:
<<It seems like more than an interesting observation. It could be the
topic of a scholarly book like the one just published on automobiles
by the Nation editor (can't recall her name.) Somehow I suspect that
.. . .
That would be Jane Holtz Kay.
.. . . the big push into suburbia--which was facilitated by
stepped-up automobile production and highway construction--was a
political calculation. The ruling class understood that workers who
owned rather than rented tended to adopt petty-bourgeois prejudices
more easily. I imagine that a foray into the policy statements of the
legislators of home mortgage interest deduction legislation would
reveal some interesting ruling class attitudes.>>
This is possible, though not necessarily the entire explanation.
As the U.S. middle class, meaning workers who were able to
increase their standard of living and accumulate some wealth,
expanded, there was a natural political demand for subsidies
to suburban areas. The location decision was probably influenced
by the appeal (and subsidized cost) of owner-occupied housing
and personal transportation, as well as racial motives.
The point about ownership, also made by Lear, is salient and
finds an analog in the UK and Thatcher's privatization of public
housing, which I gather was quite popular and made for quite
a dig at Labor, which missed out on this opportunity to please its
constituents.
> David Gordon has written that suburbia was favored because workers used
> to live in communities close by their work sites, making organizing
> easier. The author was Jane Holtz.
AKA Jane Holtz Kay, as above.
Louis said:
<<One thing to be clear about is that this "entitlement" is on the
hit-list of people like Peter Peterson and Warren Rudman. They group
it with social security as an item that benefits the upper-middle
class. So an attack on it is not necessarily progressive. Peterson and
Rudman like to point to Japan as an example of a more "enlightened"
policy since there are no such tax deductions associated with home
ownership there.>>
Most every personal deduction is on their hit list if it means
reducing the deficit. Research is pretty clear that the housing
deductions are over-whelmingly focused on upper-income persons,
though many more than "the rich." Most people who itemize (about 30%
of 101 million tax filing units) probably take the home ownership
deductions. Also, those who benefit from the deductions are not only
those taking it at any point in time, but any home owner, since
eliminating the deduction will reduce the value of all homes.
Elimination wouldn't help people trying to buy homes either, since it
would cost more for them to get in.
Strictly speaking, if the deduction was terminated and the
money used for progressive purposes, income equality would
be advanced, but the deduction is so broadly shared that advocating
its elimination would probably be the death of any movement so
advocating it. It isn't going to happen.
More from Louis:
<< . . . The questions of housing and transportation could lend
itself to the sort of green-green mystification. Advocates of "less
is more" might argue that we should walk more and live in apartments.
The problem is that the working class might just interpret this as
another form of Jimmy Carter austerity. . . .>>
Another dilemma is that it may in fact be another form of
such austerity.
LP:
<<One of the most unfortunate aspects of the Soviet Union as
socialist model is the degree to which the question of public housing
had become discredited. A renewed socialist movement should engage in
the sort of creative thinking that the Bauhaus movement produced, but
attuned to the 21st century. My suspicion is that there is less than
meets the eye in suburbia as evinced by the anomie of the teenagers
who are condemned to wander aimlessly in shopping malls like spectres
in Dante's Inferno.>>
Re: the last sentence, see George Romero's "Dawn of the Dead."
At bottom of all this is a pretty interesting question, to me at
least:
Do we want the working class to accumulate wealth held
individually (e.g., homes, stock, bonds, etc.), or must all
wealth beyond personal items be held socially? I would
say the latter is the correct socialist view but not the correct
view.
On the urban/transit stuff, readers are referred to a few EPI
reports: "Does America Need Cities?" and Elliott Sclar's
report on transit. There is also an anthology edited by
Henry Cisneros. Elliott, now at Columbia Dept of Urban Planning,
was one of the prehistoric URPE members. Currently he's finishing a
book on privatization, but he will doubtless get back to his first
love: cities without cars where you can go anywhere by
bus/subway/cable car for free.
Cheers,
MBS
"People say I'm arrogant, but I know better."
-- John Sununu
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