From the Oregonian Editorial Board, March 16:
(Gordon Oliver/Special to The Oregonian/OregonLive)
As public policy goes, the state's home-mortgage interest deduction that helps shrink Oregonians' tax bills flunks the test of public benefit.
The practice, which allows homeowners to deduct the amount of annual interest they pay to mortgage lenders, will cost Oregon nearly $500 million in lost revenue this year. The subsidy largely benefits higher-income tax filers who are more likely to itemize their deductions and who are the ones securing larger mortgages in the first place. Renters, who arguably pay property taxes just as homeowners do through their rent payments, get no similar benefit.
It's irrational, and several states, including Massachusetts, New Jersey and Ohio, don't allow taxpayers to deduct it in computing their taxable income for state purposes. But will legislators have the stomach to revise this practice?
Read the full editorial here.