In the past we’ve often criticized the home mortgage interest deduction for being economically inefficient (see here, here, and here for example.) Today we released a new “Fiscal Fact” criticising the deduction for being unfair as well—in the jargon of economists, it is “vertically inequitable.” Here’s the bottom line: Despite recent attempts by real estate, home building, and mortgage-lending organizations to portray the home mortgage interest deduction as vital to middle-income family budgets, an analysis of data from the Internal Revenue Service tells a different story. The most recent IRS data show few low- and middle-income taxpayers benefit from the home mortgage interest deduction. Those who filed tax returns with under $30,000 in adjusted gross income (AGI) in 2003 received just 9 percent of deductions for home mortgage interest, despite filing 52 percent of all tax returns. (The median taxpayer’s AGI was approximately $29,000 in 2003.) In contrast, 36 percent of home mortgage interest deductions were claimed by taxpayers with AGIs over $100,000. Click here to read the full analysis.