Shemia and the sacred cow

Oregon's secretary of state, Shemia Fagan, has decided to take on tax policy as part of her job. And of all things to start with, she's decided that you should no longer be allowed to deduct your home mortgage interest on your tax return, because it's racist and elitist.

It's a daring position for Fagan to take. The home mortgage interest deduction, as to which Oregon simply follows federal tax law, has long been regarded as politically untouchable. And it's an odd moment for her to be attacking, because the deduction is currently more limited than ever before. This year and through 2025, interest used to buy a home can be deducted only to the extent the debt doesn't exceed $750,000, and home equity indebtedness not used to fix up a house isn't deductible at all. That's way stricter than in previous years.

Yes, the deduction tends to benefit wealthier people, because, let's face it, nowadays poor and lower-middle-class people can't afford to buy a home. But the deduction also helps people who can just barely afford to own. They can afford a bigger mortgage payment than they can a rent payment, bceause of the tax write-off. (They probably also get to deduct their property taxes, which helps further.)

Now, I agree with Fagan that the mortgage interest deduction currently allowed for vacation homes ought to be done away with altogether. Government may subsidize your ownership of your principal residence, but if you can afford to buy a vacation home on top of that, a beach house mortgage payment should be all on you, with no help from the taxpayers.

As for the rest of it, though, she's got to be kidding. The deduction is enormously popular, and those who dare challenge it may find themselves on some pretty deadly political hit lists.

One option that the Legislature could pursue is to "phase out" the mortgage interest deduction as the homeowner's income rises above a certain level. That is already done with a goodly number of tax benefits, so that high-income people pay a pretty "flat" income tax in this state. But when Oregon sets thresholds for that kind of "soak the rich" rule, they tend to consider you "rich" at an absurdly low level of income.

If I had to predict what will happen with this, I'd say that (a) the law isn't going to be changed, and (b) Fagan just shot herself in the foot.

On a different note, should the secretary of state be "auditing" tax policy questions at all? I thought we had a Department of Revenue, and staffers in the Legislature, for that. I thought Fagan's job was to monitor state agencies, not to make tax policy. And Lord knows, there is plenty of dubious conduct in the bureaucracy, including outright criminal conduct, that merits closer scrutiny from Fagan and her crew. Maybe she should stick to the knitting.


  1. Stick to her knitting. I had the exact same thought. If she wants to make policy, maybe she should go get back into the legislature.

  2. As a middle income home owner, I won't forget her comments when she eventually runs for governor.

  3. This is how we are turning away from home ownership into a nation of renters who can be continuously abused by Wall Street landlords.

  4. I can recall in the last few years hearing a poor young woman complaining that at the age of 24 she would never be able to own a home in Portland. When I was 24 I was sharing a one bathroom, 4 bedroom house with 3 other people and in 1978 I couldn't imagine owning a home either. It required finding a partner and matching funds from two incomes and a thirty year commitment of steady employment and sticking together and it wasn't exactly a dream home but it suits us. In the late 80's when we bought a house rent was pretty cheap and there was plenty of homes in a wide range of prices but home loans were 12% and the average house was around 55,000.00 so do the math owning a home has never been cheap.

  5. As someone who has done both children are more expensive than owning a home. Just saying.


Post a Comment

The platform used for this blog is awfully wonky when it comes to comments. It may work for you, it may not. It's a Google thing, and beyond my control. Apologies if you can't get through. You can email me a comment at, and if it's appropriate, I can post it here for you.