Promoting Wealth Building through Homeownership
AbstractCurrent tax policies, while commonly thought to promote homeownership, have generally left low-income homeowners behind other homeowners. Using a number of simplifying assumptions, our estimates of lifetime homeowner tax subsidies suggest that the average homeowner in the lowest-income quintile may receive cumulative tax subsidies that are roughly one-thirteenth the size of those received by someone in the highest-income quintile. From an asset- and wealth-building perspective, the tax system thus places low-income households at a very large disadvantage – both in their quest to become homeowners and in what happens after they achieve homeownership status.
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Bibliographic InfoPaper provided by Indiana State University, Scott College of Business, Networks Financial Institute in its series NFI Working Papers with number 2012-WP-04.
Length: 33 pages
Date of creation: Jun 2012
Date of revision:
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- Follain, James R. & Ling, David C., 1991. "The Federal Tax Subsidy to Housing and the Reduced Value of the Mortgage Interest Deduction," National Tax Journal, National Tax Association, vol. 44(2), pages 147-68, June.
- Kelly D. Edmiston & Kenneth Spong, 2012. "Tax Incentives for Homeownership and the Provision of Local Public Services," Public Finance Review, , , vol. 40(1), pages 116-144, January.
- Green, Richard K. & Vandell, Kerry D., 1999. "Giving households credit: How changes in the U.S. tax code could promote homeownership," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 29(4), pages 419-444, July.
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