The US mortgage interest deduction (MID) allows homeowners to deduct the interest paid on their mortgages from their federal tax returns, provided that they itemize deductions. Since the benefit depends on a taxpayer’s marginal tax rate, which increases with income, the MID is an “upside-down subsidy” that becomes more valuable for higher-income homeowners. I analyze the implications of converting the US MID to a mortgage interest credit (MIC) and evaluate the effects on federal revenue and the distribution of income. I argue that a MIC could be better targeted at low- and middle-income taxpayers on the margin of homeownership while also being more progressive and less expensive than the current MID.

美国抵押贷款利息扣除 (MID) 允许房主从他们的联邦纳税申报表中扣除支付的抵押贷款利息，前提是他们逐项列出扣除额。由于收益取决于纳税人的边际税率，随着收入的增加而增加，MID 是一种“倒置补贴”，对高收入的房主来说变得更有价值。我分析了将美国 MID 转换为抵押贷款利息信贷 (MIC) 的影响，并评估了对联邦收入和收入分配的影响。我认为，MIC 可以更好地针对低收入和中等收入纳税人，同时也比当前的 MID 更先进、更便宜。