Money is Policy JRT Housing-Money 4-26lores | Page 14

bipartisan advisory groups have recom-
mended that the mortgage interest deduc-
tion be transformed into a tax credit that
would be potentially available to all filing
taxpayers, not just those who itemize. 13
than 84 percent of the benefits associated
with the mortgage interest deduction go to
households with incomes of $100,000 and
above, while more than 45 percent accrue
to households with incomes of $200,000 or
more (See Figure I). Conversely, households
with annual incomes of $50,000 or less
receive just two percent of the benefits.
Federal rental
assistance
programs serve
some of our nation’s
most vulnerable
families.
Similar results were found for the property
tax deduction: 82 percent of the benefits
of the property tax deduction go to house-
holds with $100,000 and above, while 40
percent accrue to households with incomes
of $200,000 or more (See Figure J). As is the
case with the mortgage interest deduction,
those households with annual incomes of
$50,000 or less receive only two percent of
the benefits.
Because the deductions are available only
to itemizing taxpayers, those higher-income
families receiving the benefits represented
only a small fraction of the overall number
of households filing tax returns that year. In
fact, the overwhelming majority of house-
holds making under $100,000 in annual
income do not itemize on their returns. In
response to this concern, three high-level
14
In addition, higher-income households dis-
proportionately benefit from the exclusion of
capital gains from the sales of principal resi-
dences. Under current law, single taxpayers
may exclude from income up to $250,000
($500,000 if you are a married couple filing
jointly) resulting from the sale of a principal
residence. To be eligible for the exclusion,
a taxpayer must have owned and used the
home as her main home for a period of at
least two years out of the five years prior to
its date of sale. The JCT estimates that the
exclusion will cost the federal government
approximately $29 billion in fiscal year 2016
with the cost rising to $37 billion in fiscal
year 2020.
By contrast, federal rental assistance
programs serve some of our nation’s
most vulnerable families. While households
with incomes up to 80 percent of an area’s
median income are generally eligible for
HUD’s rental assistance programs, the
reality is that the incomes of those served
by these programs fall well below that
threshold. In fact, many of the households
live substantially below the federal
poverty line. *
* In 2016, the federal poverty annual-income thresholds within the
48 contiguous states and the District of Columbia are as follows:
Household Size

1
2
3
4
5
6
7
8
100% Poverty Level
$11,880
$16,020
$20,160
$24,300
$28,440
$32,580
$36,730
$40,890
The thresholds are higher for Alaska and Hawaii.
Money is Policy: How Federal Housing Dollars Are Spent