Carson Calls for Eliminating the Mortgage Interest and Charitable Deductions

November 11, 2015

Tax policy was a central focus of last night’s Republican debates, as candidates called for tax reform and defended the tax complexity and are often little more than federal seven Republican candidates have proposed eliminating all itemized deductions except for two – the mortgage interest deduction and the charitable deduction – which are especially popular with voters.

Proponents of the mortgage interest deduction argue that it represents the distorts investment towards owner-occupied housing and largely benefits high-income taxpayers. In 2016, the mortgage interest deduction will reduce federal revenues by $75 billion.

Supporters of the charitable deduction claim that it is proper for federal policy to encourage public goods provided by the charitable sector, or that individuals should not be taxed on money they give away and do not consume. Opponents claim that there is no way for the federal government to tell whether charitable contributions are furthering public aims, or that charitable contributions should just be seen as another form of consumption. As the charitable sector has grown, so has the amount of federal revenue lost through the charitable deduction, $58 billion in 2015.

Carson’s rationale for eliminating the charitable and mortgage interest deductions is simple: last night, he argued that the federal government should not subsidize any specific economic activity through the tax code. Rather than giving individuals deductions for particular purposes, Carson expressed a preference for lower tax rates overall, allowing individuals to choose whether to spend their increased disposable income on housing, charitable giving, or any other purpose.

Overall, in last night’s debates, taxes were mentioned 192 times: 119 times in the main debate and 73 times in the undercard debate. The Tax Foundation was also referenced by name three times.

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