The (Un)changing Geographical Distribution of Housing Tax Benefits: 1980 to 2000
Even though the top marginal income tax rate has fallen substantially and the tax code has become less progressive since 1979, the tax benefit to homeowners was virtually unchanged between 1979-1989, and then rose substantially between 1989-1999. Using tract-level data from the 1980, 1990, and 2000 censuses, we estimate how the income tax-related benefits to owner-occupiers are distributed spatially across the United States. Geographically, gross program benefits have been and remain very spatially targeted. At the metropolitan area level, tax benefits are spatially targeted, with a spatial skewness that is increasing over time. In 1979, owners in the top 20 highest subsidy areas received from 2.7 to 8.0 times the subsidy reaped by owners in the bottom 20 areas. By 1999, owners in the top 20 areas received from 3.4 to 17.1 times more benefits than owners in any of the 20 lowest recipient areas. Despite the increasing skewness, the top subsidy recipient areas tend to persist over time. In particular, the very high benefit per owner areas are heavily concentrated in California and the New York City to Boston corridor, with California owners alone receiving between 19 and 22 percent of the national aggregate gross benefits. While tax rates are somewhat higher in these places, it is high and rising house prices which appear most responsible for the large and increasing skewness in the spatial distribution of benefits.
|Date of creation:||Feb 2004|
|Date of revision:|
|Publication status:||published as Poterba, James (ed.) Tax Policy and the Economy Volume 18. Cambridge: MIT Press, 2004.|
|Contact details of provider:|| Postal: |
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Joseph Gyourko & Todd Sinai, 2003. "The Spatial Distribution of Housing-Related Ordinary Income Tax Benefits," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 31(4), pages 527-575, December.
- Patric H. Hendershott & Joel Slemrod, 1982.
"Taxes and the User Cost of Capital for Owner-Occupied Housing,"
Real Estate Economics,
American Real Estate and Urban Economics Association, vol. 10(4), pages 375-393.
- Patric H. Hendershott & Joel Slemrod, 1982. "Taxes and the User Cost of Capital for Owner-Occupied Housing," NBER Working Papers 0929, National Bureau of Economic Research, Inc.
- Daniel Feenberg & Elisabeth Coutts, 1993. "An introduction to the TAXSIM model," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(1), pages 189-194.
- Richard K. Green & Patric H. Hendershott & Dennis R. Capozza, 1996. "Taxes, Mortgage Borrowing and House Prices," Wisconsin-Madison CULER working papers 96-06, University of Wisconsin Center for Urban Land Economic Research.
- Donald Bruce & Douglas Holtz-Eakin, 1997. "Apocalypse Now? Fundamental Tax Reform and Residential Housing Values," NBER Working Papers 6282, National Bureau of Economic Research, Inc.
- 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.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:10322. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.