Who Benefits from Tax Expenditures? Incidence Based on Wealth

41 Pages Posted: 14 Jun 2016 Last revised: 29 Jan 2017

Date Written: June 9, 2016

Abstract

Who benefits from tax expenditures? Prior research has focused on the extent to which tax expenditures are income-regressive, without regard to household wealth. I investigate whether the mortgage interest deduction is wealth-regressive. Using detailed information on income and wealth from the Survey of Consumer Finances, I find that tax breaks from the mortgage interest deduction are increasing in wealth for the wealthiest 10% of households. Combined with the evidence that the mortgage interest deduction is income-regressive, the findings provide evidence that it is more regressive than previously thought.

Keywords: Tax Expenditures, Tax Incidence, Mortgage Interest Deduction

JEL Classification: H24, H22, D63, K34

Suggested Citation

Rozema, Kyle, Who Benefits from Tax Expenditures? Incidence Based on Wealth (June 9, 2016). Available at SSRN: https://ssrn.com/abstract=2793618 or http://dx.doi.org/10.2139/ssrn.2793618

Kyle Rozema (Contact Author)

Northwestern University - Pritzker School of Law ( email )

375 E. Chicago Ave
Chicago, IL 60611
United States

HOME PAGE: http://www.kylerozema.com

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