Research Report Options to Reform the Deduction for Home Mortgage Interest
Amanda Eng, Harvey Galper, Georgia Ivsin, Eric Toder
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Taxpayers can currently deduct interest on up to $1 million in acquisition debt used to buy, build, or improve their personal residences and interest on up to another $100,000 of home equity loans. This brief estimates the effects on revenue and the distribution of the tax burden of proposals that would replace the current mortgage interest deduction with a non-refundable interest credit of either 15 or 20 percent of interest and reduce the ceiling on the amount of all eligible mortgage debt to $500,000. We also estimate the revenue effect of phasing in the proposals over five years.
Research Areas Economic mobility and inequality Taxes and budgets
Tags Fiscal policy Individual taxes Federal budget and economy Campaigns, proposals, and reforms Federal tax issues and reform proposals
Policy Centers Urban-Brookings Tax Policy Center