Tag Archive for ‘tax policy’

Working at Home: Who Claims the Home Office Deduction?

Often cited as a “red flag” for audits, the home office deduction is in fact a legitimate business deduction with particular importance for certain careers and small business owners. Moreover – from the housing economics perspective – IRS data concerning the deduction, along with Census data reporting who works at home, can shed light on an important and growing role… Read More ›

Energy Tax Credits: Large Impacts After 2010 Rule Changes

In 2005, Congress established a number of energy-efficiency tax incentives related to housing. These policies include the tax code section 45L credit for the construction of energy-efficient homes, the 25C credit for retrofitting existing homes, and the 25D credit for the installation of power production property in new and existing homes. Using earlier IRS data for tax year 2009, we… Read More ›

Tax Policy and Housing

Tax policy plays a key role in shaping housing demand, determining business conditions and deterring or fostering economic growth. Housing-related tax policy is of such significant importance that it has been selected as a primary issue for NAHB’s 2014 legislative conference, “Bringing Housing Home,” which takes place March 17-21 as home builders and other members of the residential construction industry meet federal lawmakers. As… Read More ›

Tax Reform Discussion Draft: What the Housing Industry Needs to Know

Chairman Dave Camp of the House Ways and Means Committee published a discussion draft of a comprehensive tax reform proposal on February 26th. The 979 page legislative draft adopts the policy strategy of broadening the tax base, while lowering income tax rates. These changes are approximately revenue neutral according to the Joint Committee on Taxation. In practice, this approach means the elimination… Read More ›

How Did Homeowners Use the Energy Tax Credits?

In 2005, Congress established a number of energy-efficiency tax incentives related to housing. These policies include the tax code section 45L credit for the construction of energy-efficient homes, the 25C credit for retrofitting existing homes, and the 25D credit for the installation of power production property in new and existing homes. Using earlier IRS data for tax year 2009, we… Read More ›

Research Links the MID with Economic Opportunity

The mortgage interest deduction (MID) is linked positively with intergenerational mobility – a measure of economic opportunity – according to new academic research from economists at Harvard and Berkeley. This paper comes on the heels of separate research showing that trading the MID for lower individual income tax rates results in lower economic growth. Using matched tax panel data, the… Read More ›

New Study Examines Tax Reform and the MID

A new macroeconomic analysis by the Tax Foundation should give tax policymakers pause about using the mortgage interest deduction (MID) as a way to pay for tax reform. The Tax Foundation, a leading tax policy think tank that supports tax reform, used their macroeconomic model to examine the employment, GDP and other economic consequences of eliminating the MID to raise… Read More ›

Mortgage Interest Deduction Tax Expenditure Estimate Falls

New estimates of the budget size of federal tax expenditures have been published. And due to policy and economic changes over the past year, the estimated size of the mortgage interest deduction is down considerably. The official scorekeeper for tax expenditure and revenue estimates is the Congressional Joint Committee on Taxation (JCT). Every year the JCT updates its estimates of… Read More ›