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here are two groups in Country A. High earners, who can earn $200 per hour and low earners, who make $50 per hour worked. High
here are two groups in Country A. High earners, who can earn $200 per hour and low earners, who make $50 per hour worked. High earners face a marginal tax rate of 50% and low earners face a marginal tax rate of 20%. The government has proposed to make mortgage interest tax deductible when the mortgage secures a loan for an owner-occupied home (mortgage interest already was deductible for landlords). Which group's homeownership rate would you expect to rise by more in response to this tax change, high earners or low earners? Why?
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