Friday, August 11, 2017

Report from Tax Foundation: Home Mortgage-Interest Deduction

Which Which States Benefit Most from the Home Mortgage Interest Deduction?
10.08.2017 by Amir Sibaie
Source: https://taxfoundation.org
"Earlier this week, we reported that the Trump administration may consider reducing the cap on the home mortgage interest deduction from a maximum of $1 million acquisition debt to $500,000. We estimated that this proposal could raise as much as $95 billion to $300 billion over the next decade, depending on how the cap is structured. We also found that the tax increase would primarily fall on high-income taxpayers because they are more likely to own larger homes and have more mortgage debt. Middle- and lower-income taxpayers would be much less likely to face a tax increase.
Changes to the home mortgage interest deduction would also impact certain parts of the country differently. There is a large degree of geographic disparity in who claims the mortgage interest deduction. . .  a map that shows the average deduction amount taken per tax return, or the total amount of home mortgage interest deducted in a state divided by the number of tax returns in a state.
Two primary factors influence how much home mortgage interest is deducted in a state: state housing prices and state income levels.
Regional housing prices directly impact mortgage interest payments . . .
Income levels also impact the amount a state claims in mortgage interest. Higher-income taxpayers are more likely to purchase larger homes and have more mortgage debt . . . "

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