Download this Paper Open PDF in Browser

Who Benefits from Tax Expenditures? Incidence Based on Wealth

40 Pages Posted: 14 Jun 2016 Last revised: 6 Jun 2017

Kyle Rozema

University of Chicago - Law School

Date Written: June 5, 2017

Abstract

Who benefits from tax expenditures? Prior research has focused on the extent to which higher income households obtain larger tax breaks from tax expenditure provisions, without regard to household wealth. We investigate whether households with higher wealth obtain larger tax breaks from the mortgage interest deduction. Using detailed information on income and wealth from the Survey of Consumer Finances, we find that tax breaks from the mortgage interest deduction are increasing in wealth for the wealthiest 10% of households. Combined with the evidence that higher income households obtain higher tax breaks from the mortgage interest deduction, the findings provide evidence that the mortgage interest deduction contributes to inequality more than previously thought.

Keywords: Tax Expenditures, Inequality, Mortgage Interest Deduction

JEL Classification: H24, H22, D63, K34

Suggested Citation

Rozema, Kyle, Who Benefits from Tax Expenditures? Incidence Based on Wealth (June 5, 2017). Available at SSRN: https://ssrn.com/abstract=2793618 or http://dx.doi.org/10.2139/ssrn.2793618

Kyle Rozema (Contact Author)

University of Chicago - Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States

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

Paper statistics

Downloads
123
Rank
194,684
Abstract Views
475