Who Benefits From Asset-Building Subsidies?

Tax subsidies for asset building totaled $384 billion in 2013, with the vast majority going toward subsidizing homeownership and retirement saving. This factsheet summarizes distributional estimates of major tax subsidies for homeownership, retirement saving, and higher education. Low- and moderate-income households benefit very little from these subsidies. For example, about 70 percent of the mortgage interest deduction and employer-sponsored retirement plan subsidies go to the top 20 percent of tax payers while the bottom 20 percent receive less than one percent. Upper-income households, which likely require less incentive to save, may merely shift assets from unsubsidized to subsidized accounts.