Wednesday, November 13, 2024
Hawai'i Free Press

Current Articles | Archives

Thursday, August 10, 2017
Which States Benefit Most from the Home Mortgage Interest Deduction?
By Tax Foundation @ 7:51 PM :: 3800 Views :: Hawaii Statistics

Which States Benefit Most from the Home Mortgage Interest Deduction?

by Amir El-Sibaie, Tax Foundation, August 10, 2017 

Earlier this week, we reported that the Trump administration may consider reducing the cap on the home mortgage interest deduction from a maximum of $1 million acquisition debt to $500,000. We estimated that this proposal could raise as much as $95 billion to $300 billion over the next decade, depending on how the cap is structured. We also found that the tax increase would primarily fall on high-income taxpayers because they are more likely to own larger homes and have more mortgage debt. Middle- and lower-income taxpayers would be much less likely to face a tax increase.

Changes to the home mortgage interest deduction would also impact certain parts of the country differently. There is a large degree of geographic disparity in who claims the mortgage interest deduction. Below is a map that shows the average deduction amount taken per tax return, or the total amount of home mortgage interest deducted in a state divided by the number of tax returns in a state.

Average Home Mortgage Interest Deduction Received Per Return

The states that benefitted the most from the home mortgage interest deductions were Maryland ($3,175), California ($2,960), and Virginia ($2,931). (Hawaii ranks 4th with an average deduction of $2,629.) The states that benefitted the least were Mississippi ($964), South Dakota ($867), and West Virginia ($856).

Two primary factors influence how much home mortgage interest is deducted in a state: state housing prices and state income levels.

Regional housing prices directly impact mortgage interest payments. In areas where land is scarce, such as Hawaii, the low levels of supply will push prices up and increase the amount of interest paid on mortgages. The opposite is also true. In states such as North and South Dakota where land is plentiful, low land prices will directly reduce the number of individuals claiming the home interest mortgage deduction and the amount of the deduction.

Income levels also impact the amount a state claims in mortgage interest. Higher-income taxpayers are more likely to purchase larger homes and have more mortgage debt. In addition, they are more likely to itemize to begin with because they pay more in state and local taxes and make more charitable contributions—the two other major itemized deductions available to taxpayers.

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

MentalIllnessPolicy.org

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii

Obookiah

OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

RailRipoff.com

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

SenatorFong.com

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii