Businesses can deduct all expenses before paying taxes. Normal taxpayers (and by that I mean living, breathing people who earn money) cannot deduct any "expenses", except what's granted through deductions.

The simplest way would be for the IRS to declare: for X adults and Y kids, you get Z deduction. Z would be a reasonable amount, say $40K for a 2-adult, 2-kid home (i.e. something above the poverty level). If you make more than that, you pay the normal tax rate on everything above that amount. If you're below that, then you might be eligible for assistance, say at $30K (or somewhere near the poverty level). As we do today (in theory), the more you make, the higher the rate. All income is ordinary income, no special rates for capital gains. The "Z" amount should be set high enough that your Social Security money isn't taxed away. Social security should have no upper limit to the deduction, but an upper limit on how much they can draw per month after retirement.

This plan might work, but there is a good case to be made for "social engineering". The government looks out for the welfare of the people, and there are good reasons for people to be in homes (stability and wealth creation), send kids to college (better educated workforce equals more productivity and better lives for people), charitable deductions (help society), even renewable energy (less dependence on oil and coal equals lower health care costs, lower military budget, cleaner environment).

The easiest way to encourage positive behavior is to make it cheaper. The opposite alternative would be to ban bad behavior, which is reasonable for some things that affect others directly (like theft, assault, etc.) but can't be as easily justified for things that affect only that person. The middle road is to let anyone engage in any self-destructive behavior they want to, but that usually ends up affecting society in general, by either lessening the quality of life for everyone (such as turning neighborhoods into slums) or making society clean up the messes. So, ultimately the easiest way, encouraging good behavior through financial incentives, is also the best way for society.

I seem to remember that over the years congressmen have submitted bills or publicly stated that would equalize, reduce, or remove tax deductions for mortgages. The reason was that those who could afford expensive homes did not need to benefit more from this 'incentive' than those who could only afford less expensive homes. Neither was there any reason to subsidize building larger homes than necessary. Of the two that I remember specifically (I don't remember which house or party they were in) both lost their next election. The real estate and construction industries could not allow such a hit to their pocketbooks just because it made sense.

Contrary to the article: altho current deduction arrangements are a bit of 'haywire' in the 'social engineering', the basic idea of the 'social engineering' is sound and should not be dissed by throwing around the epithet 'loophole'.

We SHOULD prefer that people - at least those who are raising families - be homeowners rather than renters. We SHOULD perfer that they invest heavily in their homes, not in their cars. We SHOULD be promoting stable communities of involved residents, and one big way to do that is to promote people being heavily and long-term invested in their communities.

Also contrary to the article's implication: the mortgage deduction DOES 'help' people to buy. Namely it is a notable factor (not the only one, of course) that helps enable people to afford to buy and also helps motivate potential buyers to actually consider buying rather than continuing to rent.

What really needs fixing are the unfair truly 'loophole' aspects of the current deduction. Let's allow the deduction IN ADDITION TO the standard deduction, and put a reasonable cap on the annual deduction, in terms of some multiple of an index of median income for the given household size.

yes no deduction on any personal interest , no standard deuction