The government increases what it takes and all of the sudden the money that it does not take becomes a subsidy? I am not saying that taxing interest on mortgage is unfair way of covering the expenses incurred by the government, but that deduction is not something given to people. It is something not yet taken away from them.[/quote]
1st, it was a subsidy for all debt when all interest was deductible. The remaining deductions for mortgage and other interest is still a subsidy. (The argument used in the mid-80’s when the elimination of the personal interest deduction was proposed is that it was a subsidy for borrowers who went into debt.)
2nd, your argument would seem to support never reducing government entitlements or expenditures. So social security can never be reduced, medicaid cutbacks are out of the question, the Earned Income Credit must be permanent, reduction of college education funding should have been opposed, and eliminations of government employee retirement plans is yet again, the government taking something away. Is that really the argument you want to make?
