41 Pages Posted: 14 Jun 2016 Last revised: 29 Jan 2017
Date Written: June 9, 2016
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: Suggested Citation