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MID drives Racial Wealth Gap

The Institute on Assets and Social Policy (IASP) and The National Low Income Housing Coalition (NLIHC) are thrilled to release a timely report, “Misdirected Investments: How the Mortgage Interest Deduction Drives Inequality and the Racial Wealth Gap.” The report shows that while African Americans and Hispanics each account for 13% of the nation’s households, they receive only 6% and 7% of the tax benefits from the mortgage interest deduction (MID). White households receive nearly 78% of the deduction’s benefits.

Read the Report

This report proposes reforms that would provide greater equity in the distribution of federal housing expenditures.

These reforms include converting the deduction to a tax credit, which would provide all mortgaged homeowners with tax relief regardless of their income, and lowering the cap on the amount of a mortgage eligible for a tax break from $1 million to $500,000. The significant savings from these two reforms - $241 billion over ten years- should be reinvested in housing for the lowest income households and households of color who are most in need of assistance through solutions like the national Housing Trust Fund.

Meet the Researchers

Tom Shapiro

Tom Shapiro


'Consistent with understanding race and wealth, for a long time we have wanted to understand how the Mortgage Interest Deduction contributes to the racial wealth gap.'
 
Tatjana Meschede

Tatjana Meschede

'We have known how the Mortgage Interest Deduction benefits the wealthiest homeowners. Now we also know its dramatic racial dimensions.'
 
Laura Sullivan

Laura Sullivan



'We hope this first evidence of the racial impact of the Mortgage Interest Deduction helps to galvanize policy reform for housing security for all.'
 

Meet our Partner


 
Established in 1974 by Cushing N. Dolbeare, the National Low Income Housing Coalition is dedicated solely to achieving socially just public policy that assures people with the lowest incomes in the United States have affordable and decent homes.


Follow their work @NLIHC
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Copyright © 2017 Institute for Economic and Racial Equity (IERE), All rights reserved.


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