If you are only talking about the residential rental business, you are right. But GAAP applies to all businesses, and interest is usually considered a business expense. For instance, if a gas station takes out a loan to install new gas pumps the interest on that loan is a business expense. If a large company takes out a loan to build a 500 unit apartment building, the interest on that loan is a business expense. If Ford takes out a loan to build a new production line, the interest on that loan is a business expense. Are you really going to tell me that those guys get to expense interest while I, as a small time landlord with only a few rental units can't?
Now think about this for a few minutes. How can the tax code differentiate between one kind of business or another one? Either interest on a business loan is deductible or it isn't. And the minute you say well, we will just make a list of types of business and not let their loans be deductible, while other ones are, you are on the road to turning the economy upside-down. Ten thousand smart tax lawyers will immediately begin figuring out ways to kick rental real estate into the deductible category. Build a store with apartments above it. Is that retail or residential? What about apartments above a mechanic shop?
And what about new businesses? Will they have deductible interest or not? Do you really want to strangle the innovation that has make the US the most prosperous country in the history of the world?
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...This is a very heavy burden on this group, paying tens of billions that were not paid due to homeowners and landlord deductions...
You really ought to look up the percentage of taxes paid by various income groups. The figures for 2012 are: the top 1% of taxpayers paid 38% of all federal taxes, the top 10% of taxpayers paid 70%, and the top 25% paid 86.4% of federal taxes. The people you are talking about are in the bottom 75% of taxpayers (The income break point was ~$73k.). If you really believe that 75% of taxpayers paying 14% of all taxes is a "heavy burden", I think you are perilously close to the road to communism.
I am well aware of breakdown of the tax payments structure.
You have readily admitted the amount of mortgage and business interest deductions made in this nation. I think we can safely say we’re talking hundreds of billions of dollars there.
I believe you stated 75% of the populace pays just 14% of the taxes. While that percentage seems small, what is the impact of that 14% on their lives?
People in this group struggle to merely put a roof over their family’s head, provide food clothing a good education including college if they are lucky.
It’s not easy making ends meet for a family of four on $60,000 a year.
75% of our populace struggles to provide their own essentials. The 25% do pay the lion’s share of the taxes, but they still have large expendable income that remains.
Do you think the lower to mid middle class tax is increased or decreased by the amount of deductions taken by homeowners and businesses?
Are people in this group allowed to take interest payment deductions?
I do have to thank you though. Your description of the business interest tax deduction being what caused this nation to flourish was the best laugh inducing line I’ve heard in years.