[HereInTheHeartland]

“there is no reason why John should pay more in income taxes than Jack, just because John is more prudent and chose to take on less debt.”

Well maybe John lives in a town of 200 people in western Nebraska and his home is the most expensive in town.

And Jack may own a rat infested hellhole in east Los Angeles.

You can't just look at the price of a home. And other things like family size matter also.

[Notary Sojac]

You miss the point that I specified "all else held equal". And you also miss the point that the deduction does not help all homeowners. It helps only those who take on huge loads of debt.

In fact, it is a direct reward for stupidity. Let's take another example. Mary and Diana are purchasing essentially identical homes in the same neighborhood, and have the same amount saved for a down payment.

Mary pays the asking price of $250,000. Diana negotiates the price down to $210,000. Because Mary now needs to take out a larger loan, she gets a bigger deduction.

Talk about a misdirected incentive.....