Monday, November 26, 2018

Comparison of 2017 and Latest 2020 Estimates: Federal Mortgage Interest Deduction Tax Expenditures Projected to Decline by $527 Billion/64% in 8 FY's From 2018-2025.

The US Treasury posts annual tax expenditures estimates HERE.  Their most recent report ("FY 2020") was posted in October and includes changes made as a result of tax reforms that began to take effect in 2018. 

I wanted to see how the latest tax expenditure estimate for the mortgage interest deduction [MID] compared to the estimate the Treasury made in FY 2017.  (I made no adjustment for inflation). 

I found:
  • In their FY 2017 report (before tax reform) the Treasury estimate showed cumulative FY 2018-FY 2015 MID tax expenditures of $817 billion
  • In the latest estimate the Treasury cumulative FY 2018-FY 2025 MID tax expenditure estimate is $290 billion, a decline of $527 billion or 64%. 
  • During this 8 year period the annual gap between the FY 2017 and the latest (FY 2020) MID tax expenditure projection increases each year, from $39 billion in FY 2018 to $82 billion in FY 2025. 
The first graph pasted below shows MID tax expenditures by FY and cumulative FY 2018-2025 expenditures from both the 2017 and 2020 Treasury reports; the second graph shows the annual and cumulative FY2018-FY 2025 difference between the two Treasury estimates (FY 2020 and FY 2017).

Originally created and posted on the Oregon Housing Blog

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