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To: c.hinton who wrote (2520)	11/6/2008 3:26:12 PM
From: TimF	Read Replies (1) of 3816

how would raising taxes have increased the bubble? I've already explained it at least twice in my posts to you, on this thread today. One more time Mortgage interest is deductible, interest for other purposes is generally not deductible for individuals. Capital gains taxes for owner occupied houses are typically zero. Capital gains taxes for other gains are typically well above zero. So you have a built in bias towards investment in housing from the tax code. And the higher the tax rates are, the stronger these factors are, and the stronger the perverse incentive to over invest in this area is.

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