Reply #69: It's not that complicated....

[ChemEng]

Take your example. You get a personal deduction. Also, liabilities (read mortgage) are subtracted from the asset value. You pay only on the net increase. If you can't afford to pay today because the asset value has increased so much relative to your current income, then you'll have a running I.O.U. to the government that you pay when you (or your heirs) sell the house (on top of capital gains).

The point is that you have a rapidly increasing asset value in part because of the tax deduction. I think you should in return pay for the privelege of using government funds (tax deduction) to help you get in a house.

You are not subsidizing the banking industry with a housing tax deduction. The housing industry, maybe, but not the banks. The tax deduction does allow more people to own homes (a great thing!), but let's call a spade a spade. It's a subsidy to people who but homes.