A home for sale in Raeford, N.C., on Sept. 6. (Swayne B. Hall/AP)

In his Nov. 13 op-ed, "Why tax breaks don't die," Robert J. Samuelson cited a study as proof that a cap on mortgage interest deduction would not significantly affect homeownership. While this is true in the short term, it is not the entire story. When Denmark reformed its mortgage deduction in the 1980s, although homeownership did not decline, the study indicated that "long-run effects on housing demand are quite sizeable" and that "significant effects on home size and home value" also occurred. The study showed that demand for housing was reduced because "reduction in the subsidy will induce homeowners to reduce total interest expenses by up to 20%," which in the long run will cause homeowners to "reduce the square footage and value of their houses."

If the mortgage deduction is capped, U.S. homeowners will see a significant deflation of property values, which will have the effect of reducing the overall wealth of many middle-class Americans, since home equity is a mainstay of middle-class wealth building. Because Danes rely more on a robust and ubiquitous private and government pension scheme, the outcome would be direr than predicted in the study.

Poul Hertel, Alexandria