| U.S. Real Gross Domestic Product (GDP) Chained (in millions of dollars) 2018
|
| $18,575,000
|
Percent of U.S. Real GDP of Federal Tax Spending on Housing 2018: 0.724%
Percent of U.S. Real GDP spent on Low-Income households: 0.347%
2018 Total Actual Outlays Unified (in millions of dollars): $4,109,000
Total U.S. Housing Tax Spending (from above): $134,506
Percent of U.S. Federal Budget Spent on All Housing: 3.3%
Percent of U.S. Federal Budget Spent on Upper-Income and Middle-Class Housing: 1.7%
Percent of U.S. Federal Budget Spent on Low-Income Housing: 1.6%
Notes:
1) From p. 180, endnote 17; Items 61 and 171 have "interactions" with each other and thus have a combined larger total each year. The singular figures are used for ease of following the tables, since the differences are not overly dramatic; 37% for 2018 and 8% for 2019, for example. p. 180
2) Government bonds for housing (Table 16-1 - Items 58, 59, 66, 168) are placed in Low-Income Spending, since the proceeds of such bonds are not used for primarily upscale housing, but for moderate and low-income housing, although some housing might be considered solid middle-class (for households in the median-income and just above range). Such bonds do also provide a tax reduction for purchasers (which are the actual Line Items dollar amounts), many of whom are wealthy, but bond purchasers also include pension funds for workers. Thus, these Item costs could also be split on a 50/50 or 40/60 basis between higher- and low-income households. If the split on bonds was 30/70, the difference would be $4 billion and the total spending split would be 55/45, not a huge difference from the 52/48 split we report in our Bottom Line. But we have chosen to bypass the direct tax benefits to wealthier bondholders and count that tax cost instead as benefits to housing users of the bond proceeds. In part this is to not be accused of trying to skew the numbers to increase totals for federal tax spending that benefits wealthier households. Nonetheless, in total of federal housing tax spending, low-income households do not receive more than middle-class and wealthy households, unlike the popular perception.
3) For Table 16-1 - Item 63; 47.5% of homeowners earned $49,000 or less in 2015, according to the Brookings Institution ( https://www.brookings.edu/blog/the-avenue/2017/10/09/who-is-the-new-face-of-american-homeownership/
) Thus, as a rough estimate, the authors split the Item 63 total of $43,760 billion into $20,786 billion (47.5%) for Low-Income Spending and $22,974 (52.5%) for Regular Spending. This likely overestimates the tax savings to the lower-income homeowners. This also likely underestimates the tax savings to those with higher incomes, as the capital gains on more expensive homes would yield higher gross tax savings. We were unable to find statistics to distinguish this category further, such as profit levels on home sales matched to household income of sellers. Nonetheless, in total of federal housing tax spending, low-income households do not receive more than middle-class and wealthy households.
4) Regarding gross domestic product (GDP), from Table 2-1; the Real GDP figure was used. This is because the U.S. Bureau of Economic Analysis (BEA), which produces the GDP statistic, most often cites the Real GDP (chained), in its reports. The BEA, usually does not cite the other GDP category, Current GDP, which overstates the real GDP due to inflation. See: https://www.bea.gov/resources/methodologies.
5) Austria's total state support for housing is 0.9% or about 1% of GDP, at 2.7 billion euros, from page 254 of "Housing subsidies and taxation in six EU countries," by Robert Wieser and Alexis Mundt, Journal of European Real Estate Research, Vol. 7, No. 3, 2014, pp. 248-269, © Emerald Group Publishing Limited, as provided by Alexis Mundt to Troy and Lydia Deckert, Oct. 2019. See also: "The following observations on the overall housing situation in Austria can be made: The total expenditure on housing subsidies are 1% of GDP." from Sect. 5 Conclusion; first 2 sentences, from a report "The Austrian System of Social Housing Finance, by Dr. Wolfgang Amann and Alexis Mundt, 2013. Dr. Amann is Director of IIBW - Insitut fur Immobilien, Bauen and Wohnen GmbH, the Institute for Real Estate, Construction and Housing, Ltd, Vienna, Austria and Alexis Mundt is an independent housing researcher based in Vienna, Austria. See: http://cms.siel.si/documents/170/docs/socialhousing-finance-amman-mundt.pdf. Please note that these totals match up very precisely in categories of funds spent, as Wieser and Mundt include in Austria's calculations the following: the mortgage interest tax exemption, the reduced capital gains tax in primary home sales (held for 2 years), direct tax spending on housing, and tax exemptions on housing bonds, which were even reduced in Austria recently. All these categories are also included in the U.S. totals compiled by Troy Deckert and Lydia Deckert. The totals also match up in the other main tax category, that of tax exemption on imputed rent, which is not included in either the Austria or U.S. totals. This is because apparently only one country in the world, The Netherlands, taxes people for imputed rental income for living in their own home, and that is at a very low level. (p. 257, Wieser, Mundt). The U.S. and Austria do not tax imputed rent, thus this supposed tax break isn't included. Thus, the housing tax spending totals for the U.S 0.724%). and for Austria (0.9%) as a percentage of GDP are
6) A $10 million cost of the HUD SHOP program under Rural Housing came from the HUD website totals for 2018, which we don't see included in Table 17-2, so it is added here. ( https://www.hudexchange.info/programs/shop/
)
7) We didn’t include the effects of FHA loans, VA loans, or of federal involvement in Fannie, Freddie and Ginnie, because those programs don’t change affordability, and often those programs make money for the budget rather than costing taxpayers.
|