[ad_1]
Thursday, July 13, 2023
Osofsky & Thomas: Implicit Legislative Bias—The Case Of the Mortgage Curiosity Deduction
Leigh Osofsky (North Carolina; Google Scholar) & Kathleen DeLaney Thomas (North Carolina; Google Scholar), Implicit Legislative Bias: The Case of the Mortgage Curiosity Deduction, 56 U.C. Davis L. Rev. 641 (2022):
The house mortgage curiosity deduction is over 100 years outdated. The deduction has been topic to growing and, at occasions, withering criticism from commentators. Students have argued that the mortgage curiosity deduction could also be a very ineffective and regressive method to subsidize homeownership. Different students have made the essential level that the mortgage curiosity deduction has a disparate racial impression: owners are disproportionately white, so the deduction disproportionately advantages white folks on the expense of individuals of colour. But, the mortgage curiosity deduction has retained exceptional and dear endurance regardless of all of the critiques.
How has the mortgage curiosity deduction persevered over a century, regardless of intensive critique? We argue that an underappreciated a part of the story of the mortgage curiosity deduction is how its very creation arose out of implicit racial bias and different cognitive biases.
First, students and policymakers ignored the racialized historical past of homeownership in the USA and relied on racist tropes in finding out the potential financial advantages of the deduction. After such associations occurred, policymakers misattributed to homeownership advantages that had been actually, a minimum of partly, advantages that flowed from whiteness. Perceiving constructive advantages from homeownership, legislators seen it as a very good price subsidizing by the tax system. Cognitive biases similar to affirmation bias then made it unlikely that, as soon as in place, the mortgage curiosity deduction can be considerably modified.
This understanding of the mortgage curiosity deduction ought to upset any future makes an attempt to characterize the deduction as a impartial, albeit flawed, method to subsidize fascinating values. Extra typically, this case examine illustrates a phenomenon that deserves extra consideration within the authorized literature: how implicit racial bias and different cognitive biases within the legislative course of make flawed laws, just like the mortgage curiosity deduction, extra prone to be made and tougher to upend. We conclude by providing options for minimizing bias in future laws and for reforming current authorized coverage that already displays such bias.
https://taxprof.typepad.com/taxprof_blog/2023/07/osofsky-thomas-implicit-legislative-biasthe-case-of-the-mortgage-interest-deduction.html
[ad_2]