He overhauled the tax system and shifted the tax base from mostly indirect taxation towards sources of income. In this new system, a house was seen as a source of income. Rents or imputed rents were therefore taxed, and costs like interest payments could be deducted.
10  Dynan, Elmendorf and Sichel (2006) argue that financial innovation has made it easier for households to use the equity in their homes to buffer their spending against income shocks, thereby reducing the volatility of aggregate consumption. Studies by Hurst and Stafford (2004) and Bennett, Peach and Peristiani (2001) provide indirect evidence supporting this argument.