MISDIRECTED
HOUSING
SUPPORTS:
Why the Mortgage Interest
Deduction Unjustly Subsidizes
High-Income Households and
Expands Racial Disparities
MAY 2021
AUTHORS: TATJANA MESCHEDE, JAMIE MORGAN, ANDREW AURAND,
DAN THREET
2
Table of Contents
Introduction .......................................................................3
A Closer Look at the Mortgage Interest Deduction (MID) ....................................3
Racial and Ethnic Disparities ..........................................................5
Redirecting MID Resources for Racial and Housing Equity ...................................7
Supporting Renters ...............................................................7
Achieving Equitable Homeownership .................................................8
Conclusion ........................................................................9
References .......................................................................10
Appendix: Data and Methods ........................................................11
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MISDIRECTED HOUSING SUPPORTS: Why the Mortgage Interest Deduction Unjustly Subsidizes High-Income Households and Expands Racial Disparities
Introduction
T
he housing safety net in the U.S. was not prepared for COVID-19. Going into the crisis, more than
10.4 million renters and nearly 6.9 million homeowners were already severely housing cost-burdened,
spending more than half their incomes on housing (U.S. Census Bureau, 2020; NLIHC, 2021). Most
severely housing cost-burdened households have extremely low incomes, and they are disproportionately
households of color. Three out of four households with low incomes eligible for housing assistance, howev-
er, do not receive it due to insufcient funding (Fischer & Sard, 2017). COVID-19 exacerbated the need for
housing assistance. Low-wage workers experienced most of the job losses in 2020 (Gould & Kandra, 2021),
and consequently many were at risk of losing their homes in the midst of a pandemic. Because of the
pre-pandemic lack of a housing safety net, new emergency assistance programs had to be created from
scratch to mitigate the potential damages.
While millions of households with low incomes struggle to meet their housing costs, the U.S. tax code
provides signicant benets to wealthier, higher-income, and more often white, homeowners. The tax
code provides $25 billion per year in tax savings to afuent homeowners through the mortgage interest
deduction (MID) that owners with mortgages can claim on their federal tax returns. This tax deduction does
not incentivize homeownership, as many MID supporters claim. Instead, as we show in this research brief,
the MID contributes to economic and racial inequality, with afuent white households disproportionately
benetting from the deduction. White households account for 66% of the U.S. population, yet receive 71%
of MID’s benets. Ninety percent of the MID’s benets go to taxpayers with annual incomes over $100,000
and 63% go to those with annual incomes over $200,000 (Joint Committee
on Taxation, 2020).
In addition, the exclusion of up to $500,000 in capital gains for joint lers
on the sale of a principal residence is a costly tax expenditure to benet
homeowners, while there is no tax deduction for the sale of a home that
has depreciated in value. This tax policy disproportionately benets
white homeowners, since homes in white neighborhoods see greater
price appreciation than homes in more diverse neighborhoods (Brown,
2010; Howell & Korver-Glenn, 2020), due to factors that include racialized
appraisals and racist residential preferences. While the MID and the capital
gains exclusions provide substantial benets to select afuent households,
the country fails to invest adequate resources to help low-income
homebuyers overcome nancial challenges and to provide extremely low-
income renters with sufcient access to affordable rental housing. Socially
just housing policy would eliminate the MID in its current form. We propose
redirecting these housing resources into homeownership opportunities for
low-to-moderate-income households and into affordable rental housing for
extremely and very low-income renters.
A Closer Look at the Mortgage Interest Deduction (MID)
Contrary to popular belief, the intent of the MID was never to encourage homeownership. The MID
was created with the adoption of the U.S. federal income tax in 1913, which classied certain business
expenses as tax-deductible, including interest on all loans. At the time, personal consumption loans,
home loans, and business loans for farms, small businesses, and individual proprietors were challenging to
differentiate. Only one-third of homeowners had a mortgage, and very few beneted from the MID since
98% of households were initially exempt from the federal income tax (Ventry, 2010). The post-World War II
housing boom fueled by government-insured mortgages and the transformation of the federal income tax
While millions
of households
with low incomes
struggle to meet
their housing
costs, the U.S. tax
code provides
signicant benets
to wealthier,
higher-income,
and more
often white,
homeowners.
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MISDIRECTED HOUSING SUPPORTS: Why the Mortgage Interest Deduction Unjustly Subsidizes High-Income Households and Expands Racial Disparities
to a more broad-based tax on a larger segment of the population made the MID available to an increasing
number of homeowners with mortgages. Over time, the deduction for interest on personal debt was
eliminated, but the deduction for mortgage interest has remained in the tax code.
For several reasons, most MID benets ow to higher-income homeowners and bypass low-income
taxpayers. First, taxpayers may deduct from their federal taxable income a standard deduction, which
differs only by marital or head-of-household status, or they may deduct from their taxable income
itemized deductions of allowable expenditures. For most taxpayers, their standard deduction is higher
than their itemized deductions, and taxpayers must itemize their deductions to benet from the MID. The
Joint Committee on Taxation estimates that only one in ve taxable returns in 2020 included itemized
deductions. Seventy percent of those itemized returns were from taxpayers with annual incomes of more
than $100,000 (Joint Committee on Taxation, 2020). Second, the value of the MID increases with income as
taxpayers with higher tax rates receive greater benets per dollar of deduction. Taxpayers in the 35% tax
bracket, for example, can reduce their taxes by 35% of the interest paid on their mortgage. Taxpayers in
the 22% tax bracket can reduce their taxes by 22% of the interest paid. Third, more afuent homeowners
can afford bigger mortgages, and the larger the mortgage and interest costs, the larger the benet of the
MID.
The Tax Cuts and Jobs Act (TCJA), signed into law on Dec. 22., 2017, reduced the cost of MID to the
federal government from $70 billion to $25 billion per year, but it further advantaged homeowners
with higher incomes and larger mortgage debt. The TCJA doubled the standard deduction, thereby
drastically reducing the number of people who would choose to le itemized deductions like the MID.
With fewer taxpayers now nding it advantageous to itemize their deductions, the MID has become even
more regressive than it already was. While the TCJA also reduced the maximum amount of a taxpayer’s
mortgage eligible for MID from $1 million to $750,000 on new mortgages and eliminated deductions
of interest on home equity loans not related to home improvement, the MID remains one of the largest
federal expenditures for housing assistance.
Research from Denmark indicates that the MID does not promote new homeownership, but it encourages
homebuyers to buy bigger homes (Gruber, Jensen, & Kleven, 2017). As the MID benet increases with tax-
bracket elevation, this tax policy incentivizes homeowners to take on larger homes and more debt as their
incomes rise.
Many believe that the MID provides a vital tax advantage to all homebuyers pursuing homeownership
for the rst time, yet most moderate-income homeowners do not benet from the deduction. The Joint
Committee on Taxation (2020) estimates that 90% of MID benets go to taxpayers with annual incomes
greater than $100,000 and 63% to those with annual incomes greater than $200,000. The Tax Policy Center
(2018) estimated that taxpayers with incomes higher than $319,100 (the 95th percentile of the income
distribution) received approximately 46% of MID’s benets in 2018, up from 32% before tax reform. The
Tax Policy Center estimates that middle-income households receive only 4% of today’s MID benets.
Most MID benets ow to higher-income
homeowners and bypass low-income taxpayers.
90% of MID benets go to taxpayers with
annual incomes greater than $100,000.
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MISDIRECTED HOUSING SUPPORTS: Why the Mortgage Interest Deduction Unjustly Subsidizes High-Income Households and Expands Racial Disparities
Racial and Ethnic Disparities
The desire to own a home is deeply ingrained in the American Dream, the national ethos of opportunity,
success, and upward mobility for families and their children. Yet, homeownership rates for Blacks and
Latinos are at their lowest since the 1980s. A closer look at current data shows that this dream cannot be
realized for many. Signicant racial and ethnic disparities exist in homeownership: 72% of white households
are homeowners, compared to 44% of Black and 48% of Latino households. For most households, and
especially for households of color, home equity presents the most considerable portion of their wealth
holdings. However, the wealth potential and tax benets of homeownership are not equally experienced in
the United States.
These racial and ethnic disparities have been created and sustained by discriminatory policies, including
state-sanctioned discrimination through redlining (Rothstein, 2017). The Federal Housing Administration
(FHA) was established in 1934 to decide which neighborhoods were considered desirable and eligible for
government-backed mortgage insurance. The FHA based these decisions, critical to lenders, partially on
the racial composition of the neighborhoods, deeming communities of color high-risk. Despite the Fair
Housing Act in 1968, housing discrimination continues through real estate and lending practices. Realtors
favor white home seekers partly by showing them more housing options compared to equally qualied
people of color (Turner et al., 2013; Choi, Dedman, Herbert, & Winslow, 2019). Black and Latino mortgage
borrowers are more likely to be steered into high-cost, high-risk loans that erode the wealth-building
potential of homeownership (Steil et al., 2018).
The share of households who have mortgages exhibits a similar racial and ethnic disparity (Figure 1).
While 38% of white households were homeowners with mortgages in 2016, just 28% of Latino households
and 23% of Black households were homeowners with mortgages. Longitudinal data from the American
Housing Survey suggests this disparity is persistent: between 1985 and 2019, the gap between the share
of white and Latino households with mortgages only fell by two percentage points, and the gap between
white and Black households actually increased by one percentage point.
0
20
40
60
80
100
AsianLatinoBlack
White
Source: Authors’ analysis of SIPP 2014 Panel Wave 4, covering reference year 2016.
Figure 1: Housing Tenure by Race/Ethnicity
Owned with Mortgage RentedOwned without Mortgage Occupied without Payment
23%
28%
39%
38%
31%
22%
20%
18%
41%
48%
52%
27%
3%
3%
3%
2%
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MISDIRECTED HOUSING SUPPORTS: Why the Mortgage Interest Deduction Unjustly Subsidizes High-Income Households and Expands Racial Disparities
White and Asian homeowners tend to have higher incomes than Black and
Latino homeowners, which further contributes to disparities in MID benets.
While 41% of white homeowners and 57% of Asian homeowners have
household incomes at or above $100,000, only 29% of Black homeowners
and 30% of Latino homeowners have incomes that large (Census Bureau,
2020).
Eligibility for the MID is selective and exclusionary. A household needs to
own a home with a documented mortgage with a lender, excluding renters
and homeowners without mortgages. Under these eligibility criteria, the
MID advantages white households who have consistently higher rates of
homeownership than households of color. The historic high homeownership
gap between white and Black/Latino households further exacerbates the
inequitable racial distribution of the MID. The MID aids households that have
already experienced many advantages throughout the past century.
With higher incomes and homeownership rates, white households disproportionately benet from the MID.
White households comprise 66% of the U.S. population yet received 71% of the estimated MID benet in
2018. In contrast, while comprising 13% of the overall population, Black households received only 8% of
the estimated MID benet. Latino households constitute 14% of the U.S. population but received 10% of
the tax benet. Asian households experience a disproportionate advantage, most likely due to their higher
proportion of homeowners carrying a mortgage and to the larger mortgages owed by higher-income Asian
homeowners. Part of that disproportionate advantage is explained by geography, as Asian households are
likelier to live in states with higher housing costs (NLIHC, 2015).
The Joint Committee on
Taxation estimates the MID
amounts to a $25 billion
tax expenditure annually
(JCT, 2020). Converting
the disproportionate
distribution of MID
benets into monetary
estimates, we see white
households receive
$17.7 billion in benets
from the MID, compared
to $2.6 billion for
Latino households and
$1.9 billion for Black
households. White
households receive $1.1
billion more, while Latino
and Black households
receive $0.8 billion and
$1.2 billion less than they
would receive under an
equitable distribution of
benets.
Figure 2: Current vs. Equitable Share of Mortgage
Interest Deduction Benefit
White
Black
Latino
Asian
Other
Household
Race/Ethnicty
Note: An equitable share assumes the MID benefit is proportional to the
distribution of households by race and ethnicity
Equitable Share
Current Share
70.9%
66.1%
12.5%
7.7%
13.9%
10.3%
4.9%
8.8%
2.2%
2.6%
With higher
incomes and
homeownership
rates, white
households
disproportionately
benet from the
MID.
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MISDIRECTED HOUSING SUPPORTS: Why the Mortgage Interest Deduction Unjustly Subsidizes High-Income Households and Expands Racial Disparities
The MID directs federal tax expenditures to afuent homeowners, while millions of low-income people
struggle to pay their rent. In the U.S., fewer than four rental homes are affordable and available for every
ten extremely low-income renters, whose household incomes are less than the poverty rate or 30% of their
area median income (NLIHC, 2021). More than 7.5 million extremely low-income renters spend more than
half of their incomes on housing due to this shortage of affordable rentals, leaving very little money for
other necessities.
Afuent homeowners are disproportionately white, but extremely low-income renters are
disproportionately people of color. Twenty percent of Black households and 14% of Latino households are
extremely low-income renters, compared to 6% of white households (NLIHC, 2021). This disparity reects
discrimination in housing markets that curtails homeownership for Black and Latino households, as well as
discrimination in the labor market that suppresses wages for people of color. As a result, the shortage of
affordable rental housing disproportionately impacts people of color.
Redirecting MID Resources for Racial and Housing Equity
The MID tax expenditure exacerbates racial, economic, and housing disparities. Its benets predominantly
go to afuent households presumably with little need for housing assistance, while Congress underfunds
affordable housing programs critical to the housing stability of low-income people. The MID furthers
racial disparities by directing scarce resources to wealthier, disproportionately white households at the
expense of communities of color where homeownership is low and difcult to attain. The mortgage
interest deduction should be eliminated, with resources redirected to address the greatest housing needs.
The following policy recommendations propose ways to redirect MID resources to both potential and
struggling homeowners and renters with low incomes, which would serve more important needs and help
rectify unjust racial disparities.
SUPPORTING RENTERS
Savings from eliminating the MID could be reinvested in housing assistance for renters with the lowest
incomes, who are at far greater risk of housing instability than the MID’s beneciaries.
The costs of MID could be redirected to additional rental assistance, like Housing Choice Vouchers (HCV),
to help low-income families afford rental housing in the private market, up to a modest rental amount.
Serving households with some of the lowest incomes, the average income of an HCV household is $15,202
(HUD, 2021). While running for ofce, President Biden called for the Housing Choice Voucher program
to be fully funded, so that every household eligible for federal rental assistance receives it (Biden-Harris
Campaign, 2020).
The mortgage interest deduction should
be eliminated, with resources redirected to
address the greatest housing needs.
The costs of MID could be redirected to
additional rental assistance, like Housing
Choice Vouchers.
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MISDIRECTED HOUSING SUPPORTS: Why the Mortgage Interest Deduction Unjustly Subsidizes High-Income Households and Expands Racial Disparities
While vouchers are an essential tool to meet the housing needs of extremely low-income tenants, they will
not be sufcient. In many housing markets that lack source-of-income discrimination protections, landlords
refuse to accept vouchers. Some housing markets have a limited supply of rental housing, making it hard
for recipients to use their vouchers. Securing stable housing for all requires that Congress increase capital
investments in the production, operation, and upkeep of affordable, safe, and healthy rental housing.
More investment is needed in the national Housing Trust Fund, a block grant to states for the creation,
preservation, and rehabilitation of rental housing for extremely low-income tenants. Congress must also
ensure resources to protect the affordable housing stock that already exists, including public housing
operated by public housing authorities and HUD-assisted housing operated by private owners. The Biden
administration’s proposed “American Jobs Plan” calls for $213 billion to produce, preserve, and retrot
more than two million affordable homes, including $40 billion to make urgently needed improvements to
the public housing stock (White House, 2021). Even with this signicant investment, though, more would
be needed to address the shortage of affordable and available homes, and funds redirected from the MID
could help meet those needs.
Additionally, the money currently spent on wealthier homeowners could be
used instead to support programs that would keep renters stably housed
during short-term nancial crises. A permanent, national emergency
stabilization fund would provide short-term nancial assistance to help
low-income households overcome economic shocks that threaten their
housing stability. Eviction Lab found that many judgments in eviction cases
are for debts less than $600 (Badger, 2019), suggesting that in some cases
relatively modest interventions could keep families housed. Congress also
needs to redress the power imbalance between landlords and tenants, by
extending funding for a national right to counsel in eviction proceedings
and vigorous enforcement of the Fair Housing Act.
ACHIEVING EQUITABLE HOMEOWNERSHIP
The MID is structured to provide higher rewards for homeowners who
can already afford and access high debt. As such, the MID is a substantial
investment that does not support homeownership for those who could
most benet from housing policy interventions. Equitable homeownership
is possible with investments in nancial products and programs that break
down barriers to homeownership or help people with bank-owned debt
stay in their homes.
The Department of Housing and Urban Development identied access to
capital and credit as primary barriers to homeownership (Steil et al., 2018;
Turner et al., 2013). Financial challenges that keep people from buying
a home, including reductions in credit availability following the Great
Recession, persist. Investment in nancial products that seek to advance
racial equity would help to remove the capital and credit barriers to
homeownership.
One solution to these nancial challenges is an investment in small-dollar
mortgages (under $70,000) for single-family home purchases, renances,
and improvements. In many communities, low-cost home sales represent
a substantial portion of the market, with a typical small-mortgage
borrower having a median income of $35,000 (McCargo et al., 2018).
Recognizing that the Federal Housing Administration underserves small-
dollar mortgages, Congress should require HUD to review the effects of
Equitable
homeownership
is possible with
investments in
nancial products
and programs that
break down barriers
to homeownership
or help people with
bank-owned debt
stay in their homes.
Congress should
require HUD to
review the effects
of FHA mortgage
insurance policies,
practices, and
products on small-
dollar mortgage
lending.
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MISDIRECTED HOUSING SUPPORTS: Why the Mortgage Interest Deduction Unjustly Subsidizes High-Income Households and Expands Racial Disparities
FHA mortgage insurance policies, practices, and products on small-dollar mortgage lending. Legislation
mandating such a review passed the House of Representatives in 2020, and it should be reintroduced
(116th Congress, 2020).
Mission-aligned lenders are taking action to address the legacy of systematic racism in real estate. IFF,
a Community Development Financial Institution (CDFI) in Illinois, offers non-appraisal-based lending to
provide nonprots with exible debt to serve low-income communities. IFF bases its lending products
on what the nonprot applicant can afford and how well the property ts the nonprot’s mission and
needs, rather than on the market value of the property. IFF’s approach is vastly different from a traditional
comparable appraisal method that historically under-values communities with low-cost housing and
articially increases the assessed risk of investment, allowing banks to deny development loans to build
affordable units.
For homeowners, buying a home is often their most signicant nancial investment. Tax credit relief
through the mortgage interest deduction is a costly program for the federal government that pays out
once a year, yet problems that could lead to foreclosure happen year-round. For the nearly 40% of
Americans who are liquid-asset poor, 62% of whom are Latino and Black households, programs such as
Mortgage Reserve Accounts (MRAs) can help homeowners avoid defaulting due to an emergency (Agava
et al., 2020). Similar to individual development accounts (IDAs) and child savings accounts (CSAs), MRAs
incentivize savings through matching funds and are often administered by CDFIs. The recent pandemic
response to COVID-19 has proven that we are all susceptible to emergencies that could severely
jeopardize our ability to fulll nancial obligations.
Furthermore, this study estimates the racial distribution of MID benets because the Internal Revenue
Service does not collect or publish tax data by race. In addressing how the tax system impoverishes
Black Americans, Brown (2021) outlines several solutions to exposing racial disparities that do not require
individuals to identify their race on their returns. These solutions include methods like ours to match
taxpayer data to Census data. As homes are a substantial personal investment with considerable tax
implications, understanding how our tax system affects homeowners by race is essential to advancing
equity.
Conclusion
The COVID-19 pandemic has highlighted the cracks of our inequitable housing systems. While many
evictions and foreclosures are temporarily on hold, low-income renters and homeowners are still
accumulating debts that will threaten their housing stability once moratoriums end. Even when the
economy is in better shape, 70% of the lowest-income renters will spend more than half their income on
housing. So long as there are urgent housing needs among lower-income households, tax policies that
lavish benets on the highest-income homeowners are unjustiable. The $25 billion in tax dollars forgone
each year for the MID could instead be used to meet the urgent needs of lower-income households for
stable housing. A place to call home should be afforded to all.
The $25 billion in tax dollars forgone each year for the MID
could instead be used to meet the urgent needs of lower-
income households for stable housing.
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MISDIRECTED HOUSING SUPPORTS: Why the Mortgage Interest Deduction Unjustly Subsidizes High-Income Households and Expands Racial Disparities
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for reducing default for low-income homeowners. Washington, DC: Prosperity Now.
Asante-Muhammad, D., Buell, J., & Devine, J. (2021). 60% Black homeownership: A radical goal for Black
wealth development. Washington, DC: National Community Reinvestment Coalition.
Badger, E. (2019). Many renters who face eviction owe less than $600. New York Times. December 12.
Biden-Harris Campaign. (2020). The Biden plan for investing in our communities through housing.
Brown, D. A. (2010). Shades of the American dream. Washington University Law Review 87(329): 329-378.
Brown, D. A. (2021). The Whiteness of Wealth. New York: Crown.
Choi, A., Dedman, B., Herbert, K., & Winslow, O. (2019). Long Island divided. Newsday.
Fischer, W., & Sard, B. (2017). Chart book: Federal housing spending is poorly matched to need. Washing-
ton, DC: Center on Budget and Policy Priorities.
Gould, E., & Kandra, J. (2021). Wages grew in 2020 because the bottom fell out of the low-wage labor
market: The state of working America 2020 wages report. Washington, DC: Economic Policy Institute.
Gruber, J., Jensen, A., & Kleven, H., (2017). Do people respond to the mortgage interest deduction? Qua-
si-experimental evidence from Denmark. Working paper, NBER.
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ing Values, 1980-2015. Social Problems, online rst.
Joint Committee on Taxation (2020). Estimates of federal tax expenditures for scal years 2020-2024.
Washington, DC: Author.
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properties. Washington, DC: Urban Institute.
National Low Income Housing Coalition. (2015). A rare occurrence: The geography and race of mortgages
over $500,000. Washington, DC: Author.
National Low Income Housing Coalition. (2021). The Gap: A shortage of affordable homes. Washington,
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Steil, J. P., Albright, L., Rugh, J. S., & Massey, D. S. (2018). The social structure of mortgage discrimination.
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Sullivan, L., Meschede, T., Shapiro, T., & Escobar, M. F. (2017). Misdirected investments: How the mortgage
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MISDIRECTED HOUSING SUPPORTS: Why the Mortgage Interest Deduction Unjustly Subsidizes High-Income Households and Expands Racial Disparities
Turner, M. A., Santos, R., Levy, D. K., Wissoker, D., Aranda, C., & Pitingolo, R. (2013). Housing discrimi-
nation against racial and ethnic minorities 2012: Executive summary. US Department of Housing. Urban
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U.S. Census Bureau. (2020). American Community Survey, 2019.
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Appendix: Data and Methods
Analysis for this report is based on a
combination of data sources, as the
Internal Revenue Service does not
collect information on the race or
ethnicity of tax lers. We conducted
weighted analyses of the most recently
available 2014 Survey of Income and
Program Participation (SIPP) Panel
Wave 4, to measure household-
level demographic factors, including
housing type, income, and race. This
dataset covers the reference year
2016 from January to December.
Since 1984, the U.S. Census Bureau
has sponsored SIPP to provide regular
reporting on household economic
conditions. Estimates on individual tax
expenditures for mortgage interest
deduction (MID) are from the 2020
Joint Committee on Taxation report.
This paper followed the analytic
approach of Sullivan, Meschede,
Shapiro, and Escobar (2017) to
calculate the estimated benets of the
mortgage interest deduction program.
We applied SIPP demographic data
to eight income categories from the
Joint Committee estimates to nd the
estimated amount of MID benets by
race. Households with an income class
below $10,000 were excluded from
TABLE 1: HOMEOWNERS WITH MORTGAGES AT
DIFFERENT INCOME LEVELS, BY RACE AND ETHNICITY
INCOME LEVEL
(THOUSANDS)
HOMEOWNERS WITH MORTGAGES
White Black Latino Asian
Below $10 3% 3% 2% 3%
$10-20 3% 6% 4% 1%
$20-30 5% 8% 6% 0%
$30-40 5% 8% 8% 3%
$40-50 6% 8% 8% 3%
$50-75 18% 23% 19% 13%
$75-100 16% 15% 17% 11%
$100-200 32% 22% 27% 38%
Above $200 13% 7% 11% 28%
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MISDIRECTED HOUSING SUPPORTS: Why the Mortgage Interest Deduction Unjustly Subsidizes High-Income Households and Expands Racial Disparities
the sample due to their low rate of tax ling. The total amount of MID benets by race is a summation
of MID benets from the income categories. The percentage of total benets from MID by race is the
proportion of benets each racial group was estimated to receive. The proportion of benets by race is
compared to the racial composition of all households to nd an equal projected distribution of benets,
to understand the impact of the MID program on racial equity. Differences between the estimated MID
benets and equally distributed MID benets indicate that the program is not equally distributed across
racial categories.
TABLE 2: ESTIMATES OF RACIALLY AND ETHNICALLY DISPROPORTIONATE FEDERAL TAX
EXPENDITURES
ESTIMATED NUMBER
OF TAX RETURNS
WITH DEDUCTION
PERCENTAGE TOTAL
OF BENEFIT FROM
DEDUCTION
PERCENTAGE OF
HOUSEHOLDS BY
RACE/ETHNICITY
RACE/ETHNIC
ADVANTAGE/
DISADVANTAGE
White 9,710,745 70.92% 66.14% 4.78%
Black 1,155,847 7.72% 12.46% -4.74%
Latino 1,558,712 10.33% 13.86% -3.53%
Asian 1,004,663 8.81% 4.91% 3.90%
Other Races 297,499 2.22% 2.62% -0.40%
TABLE 3: COMPARISON OF CURRENT ESTIMATED MID BENEFITS WITH EQUALLY DISTRIBUTED
BENEFITS
TOTAL ESTIMATED AMOUNT
OF MID BENEFIT
EQUAL PROJECTED
DISTRIBUTION OF BENEFITS
DIFFERENCE BETWEEN CURRENT
ESTIMATED BENEFITS AND
EQUALLY DISTRIBUTED BENEFITS
White $17,733,052,800 $16,537,171,376 +$1,195,881,424
Black $1,929,566,700 $3,115,409,062 -$1,185,842,362
Latino $2,582,229,100 $ 3,465,455,024 -$883,225,924
Asian $2,203,525,300 $1,227,661,195 +$975,864,105
Other Races $554,909,100 $655,086,015 -$100,176,915
