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Publications By Author

Author: Harris, Benjamin H.

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Who Benefits from Asset-Building Tax Subsidies? (Fact Sheet / Data at a Glance)
C. Eugene SteuerleBenjamin H. HarrisSigne-Mary McKernanCaleb QuakenbushCaroline Ratcliffe

Tax subsidies for asset building totaled $384 billion in 2013, with the vast majority going toward subsidizing homeownership and retirement saving. This factsheet summarizes distributional estimates of major tax subsidies for homeownership, retirement saving, and higher education. Low- and moderate-income households benefit very little from these subsidies. For example, about 70 percent of the mortgage interest deduction and employer-sponsored retirement plan subsidies go to the top 20 percent of tax payers while the bottom 20 percent receive less than one percent. Upper-income households, which likely require less incentive to save, may merely shift assets from unsubsidized to subsidized accounts.

Published: 09/24/14
Availability:   PDF

Flattening Tax Incentives for Retirement Saving (Research Report)
Barbara ButricaBenjamin H. HarrisPamela PerunC. Eugene Steuerle

Under current law, a large share of tax benefits for retirement saving accrues to high-income employees. We simulate the short- and long-term effect of three policy options for flattening tax incentives and increasing retirement savings for low- and middle-income workers. Our results show that reducing 401(k) contribution limits increases taxes for high-income taxpayers; expanding the saver's credit raises saving incentives and lower taxes for low- and middle-income taxpayers; and replacing the exclusion for retirement saving contributions with a 25 percent refundable credit benefits primarily low- and middle-income taxpayers, and raises taxes and reduces retirement assets for high-income taxpayers.

Published: 06/30/14
Availability:   PDF

Student Loans Rising: An Overview of Causes, Consequences, and Policy Options (Article)
William G. GaleBenjamin H. HarrisBryant RenaudKatherine Rodihan

The share of households with student loans rose from 9 percent in 1989 to 19 percent by 2010, while inflation-adjusted median student debt rose by more than 50 percent. Rising debt burdens can affect numerous outcomes. For those in school, loans may affect completion rates, choice of major, and academic performance. After students graduate, debt can impact career choice and pursuit of a graduate education. Loan burdens can also affect decisions later in life, such as homeownership, marriage and saving. The costs of having higher student loan debt should be weighed against the well-documented economic returns to acquiring more education.

Published: 05/14/14
Availability: HTML | PDF

Tax Subsidies for Asset Development: An Overview and Distributional Analysis (Research Report)
Benjamin H. HarrisC. Eugene SteuerleSigne-Mary McKernanCaleb QuakenbushCaroline Ratcliffe

The federal government channels much of its support for asset building through the tax code. Asset-building tax subsidies, primarily for homeownership and retirement saving, totaled $384 billion in 2013. This report reviews federal tax expenditures for housing, retirement, savings, business development, and higher education. We highlight research on the effectiveness of and justifications for these expenditures, find limited efficacy in their current form, and note possible adjustments. We estimate the distributional effect of major tax expenditures and find that the vast majority of subsidies benefit the top two income quintiles. Last, we review prospective policies such as matched saving accounts and automatic enrollment.

Published: 03/07/14
Availability:   PDF

New Perspectives on Homeownership Tax Incentives  (Research Report)
Amanda EngBenjamin H. HarrisC. Eugene Steuerle

This report presents three tax reforms designed to promote homeownership through a channel other than the deductibility of mortgage interest. These reforms include a first-time homebuyer tax credit, a refundable tax credit for property taxes paid, and an annual flat amount tax credit for homeowners—all paid for by limiting current tax expenditures for housing. Although far from perfect, these reforms would provide a more efficient and equitable allocation of housing subsidies. Our simulations show that relative to existing incentives, each policy would raise home prices and make the tax code more progressive.

Published: 01/06/14
Availability:   PDF

Property Taxes in the United States (Article/Tax Facts)
Benjamin H. HarrisBrian David Moore

This Tax Fact examines the property tax burden as a share of home value in the United States. Most counties have property tax burdens between 0.5 and 1.5 percent of home value. As a share of home values, counties in the Northeast, parts of the Midwest, and Texas tend to have higher property taxes relative to other counties.

Published: 12/04/13
Availability:   PDF

Residential Property Taxes in the United States (Research Report)
Benjamin H. HarrisBrian David Moore

This brief presents an overview of residential property taxes. The brief considers recent trends in aggregate property tax revenues and examines the property tax at the county level. Property taxes are an important source of revenue for local governments, though effective property tax rates vary substantially by state and region. The counties with the highest property tax burdens tend to be in New York and New Jersey, while the counties with the lowest property tax burdens are located in Alabama and Louisiana. Most counties levy property taxes that are around $1,000 per homeowner and below 1 percent of house value.

Published: 11/18/13
Availability:   PDF

New Estimates of Tax Reform's Effect on Housing Prices (Research Report)
Benjamin H. Harris

The impact of tax reform on housing prices has traditionally been studied by examining the user cost of capital— the after-tax cost to the homeowner per unit of housing. This brief summarizes findings from a new “discrete period” approach which considers the time element of housing investment and accounts for one-time transaction costs, such as transfer taxes, settlement fees, and realtor commissions. Under this framework, tax reform yields much smaller estimated house price declines and some reforms are estimated to actually boost housing prices.

Published: 09/13/13
Availability:   PDF

The Benefits of the Mortgage Interest and Property Tax Deductions (Article/Tax Facts)
Benjamin H. HarrisAmanda Eng

The benefits of itemized deductions for mortgage interest and property taxes vary by income and demographic characteristics. The two deductions increase after-tax income most for high-income families, particularly those with children, while low-income households hardly benefit at all. On average, homeowners in the highest quintile see a 1.4 percent rise in after-tax income, compared with just a 0.3 percent increase for those in the middle quintile and virtually no gain for those in the bottom two quintiles. Within each income quintile, families with children experience the largest income boost, while elderly households benefit the least.

Published: 08/27/13
Availability:   PDF

State Economic Monitor: Quarterly Appraisal of State Economic Conditions (Series/State Economic Monitor)
Benjamin H. HarrisYuri Shadunsky

The inaugural edition of the state economic monitor reviews the health of various aspects of state economies, including employment, housing, state finances, and economic growth. This monitor documents key economic conditions through June 2013 in all 50 states, and also serves as a valuable collection of various state-level economic data. One key finding in this monitor is the remarkable breath of the economic recovery, with all but six states showing gains over the past three months and past year in indices of economic activity.

Published: 07/09/13
Availability: HTML | PDF

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