Paul L. Caron

Thursday, February 12, 2009

Brown Presents "Shades of the American Dream" Today at NYU

Dorothy A. Brown (Emory) presents Shades of the American Dream at NYU today as part of its Colloquium Series on Tax Policy and Public Finance.  The co-convenors are Daniel Shaviro (NYU) & Alan Auerbach (UC-Berkeley, Department of Economics).  Here is the abstract:

Federal tax policies such as the mortgage interest deduction do not encourage anyone to become a homeowner, yet they do increase the cost of housing. Low-income homeowners regardless of race are least likely to be able to take advantage of the mortgage interest deduction. They pay for a benefit that they cannot receive. Middle and upper income black homeowners are less likely than middle and upper income white homeowners to benefit from federal tax laws supporting home ownership in different ways. The appreciation of most middle and upper income black homes are significantly less than the appreciation of most white middle and upper income white homes. As a result, those black taxpayers will not benefit as much from the tax provisions that exclude from income gain on the sale of their homes as their white counterparts will. This essay suggests three solutions which if enacted would cause the tax benefits to be more equitably distributed and no longer concentrated in the hands of higher income, white taxpayers.

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I find it very interesting that Prof. Brown determines that racial discrimination occurs as a result of homeownership tax policy. In order to combat the discrimination, she advocates a tax policy based upon race.

A better solution might be to advocate the elimination of the housing tax benefits and move to a flat tax rate or a consumption based tax. However, that would be unfair for some reason or another.

Posted by: Red | Feb 12, 2009 3:09:37 PM