Giving Handouts to the Rich
A new report from Smart Growth America, a national coalition that fights sprawl, looks at 50 federal programs that deal with housing and real estate. In total, the federal government spends around $450 billion each year on such programs, counting tax breaks, loans and loan guarantees, and direct investment in real-estate projects….
Who benefits the most from the messiness? Surprise: the rich. For instance, the biggest tax-expenditure program for housing is the Mortgage Interest Deduction, which allows people to deduct payments on their mortgage interest on their taxes. Created in 1913, the MID costs an average of $80 billion annually, and it’s supposed to help families buy a primary home. But 30 percent of the households claiming the deduction claim it on a second home—like, say, a vacation home. Lower-income families have a harder time claiming the deduction, because it requires itemized taxes.
The rich also get a hand when it comes to housing subsidies. Those who make more than $200,000 get, on average, $6,300. For those who make between $30,000 and $40,000, the number drops to only $265.
This is only further evidence that soaring deficits are not the result of America’s safety net, nor the fault of America’s poor.