Missoulian mailbag
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Real tax reform is needed. This includes eliminating the deduction for mortgage interest. Here’s why:

1. This deduction annually costs the U.S. Treasury $70 billion. Of this, $48 billion goes to the top 20 percent of taxpayers and $70 million to the lowest 20 percent. Those with the highest incomes and priciest houses benefit most.

2. The economy is distorted. Families borrow more and housing bubbles (and busts) are created. Housing is favored over other consumption. Household debt, now over 100 percent of disposable income, rises.

3. The average square footage of new homes increased from 1,660 in 1973 to 2,687 in 2015. Do we need ever bigger homes?

4. Mortgage interest deductions add little to homeownership or healthy communities. Without this tax deduction homeownership rates in Canada (67.6 percent), Australia (67.0 percent) and the U.K. (63.5 percent) are similar to the U.S. (64.5 percent).

5. Renters, mostly lower income groups, realize little if any benefit.

6. Strong real estate, construction and financial interests spend tens of millions of dollars to sway elected officials and maintain the status quo. A gradual phase-out, enabling lowering of tax rates, will create a stronger economy and a fairer tax system.

Roger S. Smith,

Polson

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