I see a couple of problems with this: First - property taxes, depending on the state, are fairly high. In my case, this largely offsets the mortgage deduction

I see a couple of problems with this: First - property taxes, depending on the state, are fairly high. In my case, this largely offsets the mortgage deduction - though not completely (maybe 75%). People talk about how the mortgage deduction is welfare for the middle class (and up), but there are also a lot of heavy taxes involved in owning property. Second - there's a difference between getting rid of a bad policy and never implementing it. If the mortgage deduction were a new proposal, I'd be opposed to it. Here's the problem - the government decided to "encourage" home ownership with a big deduction. New buyers factored it into what they could afford, and are now heavily dependent on it. Should the government now say "oh, on second thought, no, we shouldn't have encouraged you to do this after all, so we'll be pulling that rug out from under you now"? It would be very destructive. To me, this is a good illustration of how difficult it can be to remove a bad policy once it becomes very entrenched. Slowly phasing it out could work. Alternatively, removing the mortgage deduction and property tax at the same time would probably reduce the impact (if taxing discourages ownership, then we'd remove the encouragement and discouragement at the same time). Problem with this is that property taxes fund local government and the mortgage deduction is a federal deduction.