Elimination mortgage interest deduction increases homeownership

This seem paradoxical on the surface, but makes sense in this light:

Eliminating the mortgage interest deduction causes house prices to decline, increases homeownership, decreases mortgage debt, and improves welfare. Our findings challenge the widely held view that repealing the preferential tax treatment of mortgages would depress homeownership.

via Eliminating the mortgage tax deduction could boost homeownership at Marginal REVOLUTION

Crypto & Taxes, in the NYTimes

“Every time you transfer a cryptocurrency, you might trigger a gain and pay a tax,” said Selva Ozelli, a tax lawyer and accountant who has recently written about the tax implications of virtual currencies.In late 2016, the I.R.S. made it clear that it was searching for cryptocurrency tax evaders: The agency sent a broad request to Coinbase, the largest Bitcoin exchange in the United States, requesting records for all customers who bought digital currency from the company from 2013 to 2015.Coinbase balked, but a court ruled that it must provide the records of roughly 14,000 customers, fewer than 1 percent of its patrons, who made transactions involving more than $20,000 of virtual currencies.

via When Trading in Bitcoin, Keep the Tax Man in Mind at www.nytimes.com

The IRS problem with Crypto

Cryptocurrencies could pose a huge threat to governments should they be unable to collect taxes.

But the bigger concern about cryptocurrencies may be the damage they could do, in the long run, to government finances through lost tax revenue.

The core technology underlying cryptocurrencies, known as blockchain, is premised on anonymity: Transactions are public but linked only to an electronic address. This is a big part of what makes blockchain attractive.

But anonymity is also the main fuel for the underground economy, which is now conducted largely via cash. The underground economy is a significant source of lost tax revenue. The Internal Revenue Service estimates that it loses around $500 billion annually because of unreported wages alone. And the underground economy in the United States — estimated at 8.4 percent of output — is relatively small compared with those of other countries.

If cryptocurrencies were to replace cash as the preferred anonymous medium of exchange, they could significantly expand the underground economy because they are so much more convenient than cash.

via Opinion | Why the I.R.S. Fears Bitcoin at The New York Times