The report shows the impact on revenue from federal income taxes if changes to the MID as proposed by UFH were enacted.
An additional $213 billion would be generated over ten years if the two elements of the reform proposal were enacted.
Lowering the cap on the amount of mortgage debt on which the interest can be deducted from the current $1 million to $500,000, and
Converting the current deduction to 15% non-refundable tax credit. Simply lowering the cap to $500,000 would generate $95 billion over ten years. Both of these figures assume the changes would be phased in over five years.
NLIHC previously reported that only 5% of all mortgages made in the U.S. in the years 2012, 2013, and 2014 were above $500,000 and they are concentrated in a fraction of U.S counties.
The TPC report shows how the change to a 15% non-refundable tax credit would alter the distribution of mortgage interest tax breaks by income. While 34% of all taxpayers pay mortgage interest, only 58% of those who pay mortgage interest take the mortgage interest deduction.
Under the UFH proposal, 82% of taxpayers who pay mortgage interest would get the mortgage interest tax credit, almost 15 million more homeowners with mortgages than get a tax break now.
Click here for more from NLIHC including a chart showing the effects of mortgage interest reform by income.