{
  "id": "R41596",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R41596",
  "active": true,
  "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department",
  "versions": [
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      "source": "EveryCRSReport.com",
      "id": 428908,
      "date": "2014-03-18",
      "retrieved": "2016-04-06T20:34:37.420474",
      "title": "The Mortgage Interest and Property Tax Deductions: Analysis and Options",
      "summary": "Concern has increased over the size and sustainability of the United States\u2019 recent budget deficits and the country\u2019s long-run budget outlook. This concern has brought the issues of the government\u2019s revenue needs and fundamental tax reform to the forefront of congressional debates. Congress may choose to address these issues by reforming the set of tax benefits for homeowners. According to the Joint Committee on Taxation, federally provided tax benefits for homeowners will cost approximately $136.3 billion annually between 2014 and 2017. Reducing, modifying, or eliminating all or some of the current tax benefits for homeowners could raise a substantial amount of revenue, while simultaneously simplifying the tax code, increasing equity among taxpayers, and promoting economic efficiency. \nThis report focuses on the two largest federal tax benefits available to homeowners\u2014the mortgage interest deduction and the deduction for state and local property taxes. While other tax benefits for homeowners exist, these two particular benefits are the most expensive in terms of forgone revenue to the federal government. Between 2014 and 2017 the mortgage interest deduction and property tax deduction are estimated to cost around $77.3 billion and $31.5 billion annually. Congress may therefore consider modifying these two tax benefits to raise revenue. The mortgage interest deduction and property tax deduction are also the two tax benefits proponents most often argue promote homeownership. Economists, however, have questioned this claim. \nThe analysis presented in this report is structured along two dimensions. First, the analysis focuses on the rationales commonly offered for providing tax benefits for homeowners, mainly that homeownership (1) bestows certain benefits on society as a whole such as higher property values, lower crime, higher civic participation, among others; (2) is a means of promoting a more even distribution of income and wealth; and (3) has a positive effect on living conditions, which can lead to a healthier population. Although these benefits may exist, the analysis presented in this report highlights the difficulties that economists have encountered in attempting to establish their existence or magnitude.\nThe analysis then turns to examining the effect that the mortgage interest deduction and state and local property tax deduction have on the homeownership rate, housing consumption, and the economy. The analysis in this report suggests that these tax incentives may have a larger effect on the size of homes purchased than on the decision to become a homeowner. The possibility that attempting to promote homeownership via the tax code may distort the allocation of capital and labor, which could hinder the performance of the economy in the short-run and long-run, is also raised. In the process of conducting the analysis, this report briefly summarizes the historical trends in homeownership and the more recent trends in foreclosures. The report concludes with policy options that Congress may find useful as it moves forward, including proposals made by House Ways and Means Chairman Dave Camp, President Obama\u2019s Fiscal Commission, President George W. Bush\u2019s Tax Reform Panel, and the Congressional Budget Office.",
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    {
      "source": "University of North Texas Libraries Government Documents Department",
      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc815608/",
      "id": "R41596_2011Jan18",
      "date": "2011-01-18",
      "retrieved": "2016-03-19T13:57:26",
      "title": "The Mortgage Interest and Property Tax Deductions: Analysis and Options",
      "summary": null,
      "type": "CRS Report",
      "typeId": "REPORT",
      "active": false,
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  ],
  "topics": [
    "Domestic Social Policy",
    "Economic Policy"
  ]
}