August 1, 2005
Some of the costliest tax expenditures the federal government allows go to subsidizing homeownership. In 2004, the total tax expenditure value of the mortgage interest deduction was $70.2 billion while the value for the real estate tax deduction was $19.3 billion. Fifty-four percent of these sums went to taxpayers at or above $100,000 of income and 72 percent went to taxpayers at or above $75,000. Very few taxpayers receive these two subsidies at low incomes-as most low-income tax filers owe little tax, do not itemize, and are less likely to own a home-and very many taxpayers receive them at higher incomes.