Kevin Drum thinks the mortgage interest deduction is unfair because people with bigger mortgages get bigger deductions. In particular, he is concerned that people with smaller deductions get no incremental benefit because these deductions are seldom larger than their default personal exemption.
But tax deductions are always going to be like this in a progressive system -- the rates are progressive and the fixed personal exemption is extremely progressive, so the combination of the two mean that tax deductions are going to preferentially help the rich more. This reminds me of the arguments in Colorado when tax law required a tax reduction and Democrats in the state legislature complained that people who don't pay taxes would be getting no benefits from this.
He tries to posit some silly alternative tax credit system, but why bother? Haven't we had enough of distortive tax breaks that favor a single industry and/or shift investment alarmingly into a particular pool of assets (thus increasing the risk of bubbles). Isn't the whole notion of tax-subsidizing home ownership but not rentals inherently regressive, no matter how the deduction or credit is calculated? Doesn't the labor market rigidity of home ownership most penalize lower income workers who get trapped in a certain geography by their home and cannot migrate for better wages, as blue collar workers have done in past recessions and recoveries?
Why wouldn't a good progressive like Drum be advocating for an elimination of the deduction altogether? Is this one of those coke-pepsi party things, where the Republicans have taken over the issue of limiting deductions so Democrats have to reflexively defend them, even if ideologically it would make more sense for them to promote their elimination?