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Research report

Tax Subsidies for Asset Development: An Overview and Distributional Analysis

Benjamin H. Harris, C. Eugene Steuerle, Signe-Mary McKernan, Caleb Quakenbush, Caroline Ratcliffe
March 7, 2014
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Abstract

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.

Research Area

Individual Taxes Education Homeownership Income tax (individual) Retirement
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Meet the Experts

  • Benjamin H. Harris
  • C. Eugene Steuerle
    Institute Fellow and Richard B. Fisher Chair
  • Signe-Mary McKernan
    Senior Fellow
  • Caleb Quakenbush
    Research Associate I
  • Caroline Ratcliffe
    Senior Fellow
Research report

New Evidence on The Effect of The TCJA On the Housing Market

Robert McClelland, Livia Mucciolo, Safia Sayed
March 30, 2022
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