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Volume 18 - Number 1

January 10, 2014

Repealing Deductions May Boost Homeownership

A white paper circulated last week at the annual meeting of the American Economic Association asserted, somewhat counter-intuitively, that repealing the home-mortgage interest deduction and property-tax reductions would result in lower home prices but higher rates of homeownership. The paper, prepared by Kamila Sommer, an economist with the Federal Reserve Board, and Paul Sullivan, an economist at the U.S. Bureau of Labor Statistics, studied the impact of reducing housing tax expenditures on equilibrium ...

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