Subsidizing Mansions

Should we give a tax subsidy to encourage wealthy people to buy bigger mansions? We could easily fix this hidden subsidy by capping the mortgage benefit at $200,000. That would preserve the benefit for the middle class and the wealthy would get the full benefit too, but we would stop subsidizing larger mansions.

Ezra Klein - Who does the mortgage-interest deduction benefit?:

Alex Hart has a good post examining whether the mortgage-interest tax deduction -- which will cost taxpayers $131 billion in 2012 -- is really a "middle-class tax break," as some people like to claim. The answer is no,
...the less money you make, the less the mortgage-interest tax deduction does for you. ... here's the same graph in raw dollars:

...the benefits for the bottom 40 percent of the income distribution are invisible. That's not because they literally don't exist, but because the deduction is worth $2 to people between in the bottom fifth and $32 for the quintile after that. As for the top 1 percent? They're getting a break of more than $5,000.