Maryland, the richest state in the nation, ranks tops in the nation for mortgage interest deduction claims.
Using data from 2010 (the latest available) the Tax Foundation created a map showing Maryland ranks number one in the nation for taxpayers claiming the mortgage interest deduction. Thirty-Seven percent of filers in Maryland claimed the deduction, and they have benefitted greatly from it.
A Reason Foundation report noted that only 22.9 percent of all filers in 2010 claimed the deduction, a benefit that represents an $82.7 billion tax benefit. The report’s authors refute the notion that the popular tax break is a middle class tax benefit designed to spur home ownership. In, fact the mortgage interest deduction in an upper class entitlement, with the benefits of the deduction skewing toward large areas with high incomes.
The data shows households earning $100,000 or more makeup 55 percent of claimants and receive 78 percent of the deduction’s benefits. These filers save $213 to $531 a month through the deduction, while those earning $40,000-$75,000 save only $61 to $99 month.
While the amount of the subsidy has risen to over $80 billion, since 1994, the rate of homeownership has remained flat over that time.
|From Unmasking the Mortgage Interest Deduction: Who Benefits and How Much. Anthony Randazzo and Dean Stansel|
The Reason Foundation report advocates a phase out of the deduction, which it calls an “upper class entitlement,” and return the savings to taxpayers in the form of lower income tax rates.
In the recent debate over tax reform, neither of Maryland’s U.S. Senators, Ben Cardin and Barbara Mikulski, have proposed eliminating the mortgage interest deduction. It is not even a part of Cardin’s latest proposal for a “fairer and more progressive tax code.”
Both progressive senators fought to make millionaires “pay their fair share” through the so-called “Buffet Rule,” they haven’t lifted a finger to eliminate the popular subsidy many of their wealthy constituents enjoy.