TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Friday, June 29, 2012

How Current Tax Law Discriminates Against Low-Income Taxpayers

Kelly D. Edmiston & Kenneth Spong (both of the  Federal Reserve Bank of Kansas City), Promoting Wealth Building Through Homeownership:

Current tax policies, while commonly thought to promote homeownership, have generally left low-income homeowners behind other homeowners. Using a number of simplifying assumptions, our estimates of lifetime homeowner tax subsidies suggest that the average homeowner in the lowest-income quintile may receive cumulative tax subsidies that are roughly one-thirteenth the size of those received by someone in the highest-income quintile. From an asset- and wealth-building perspective, the tax system thus places low-income households at a very large disadvantage -- both in their quest to become homeowners and in what happens after they achieve homeownership status.

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