A home ownership tax credit favored by the wealthy disproportionately benefits residents of Maryland and Montgomery County, particularly Bethesda, Gaithersburg and Frederick, a report from Pew Charitable Trusts found.
Some members of Congress, however, are working to cut the mortgage interest deduction from the tax code.
In Maryland, 37 percent of tax filers claim the deduction, while more than 40 percent of tax filers in Bethesda, Gaithersburg and Frederick claim the mortgage interest deduction, the largest percentage in the country, Bloomberg BusinessWeek reported. Nationally, only 22 percent of filers claim the deduction, Bloomberg reported. The deduction is typically filed in wealthy areas with high rates of home ownership.
In the 20902 zip code, 33.2 percent of tax filers take advantage of the mortgage interest deduction, according to data from Pew.
Rep. Dave Camp (R-MI), chairman of the House Ways and Means Committee, is looking to simplify the nation's tax code and eliminate breaks, Bloomberg reported last week. Camp is pushing for his committee to approve a bill that may eliminate this deduction this year.
Pew's report highlighted the effects on some local economies if the tax deduction were eliminated:
Policy makers should be aware of the geographic implications of changes in federal tax policy as debates over federal deficit reduction and tax reform move forward.
Tax filers in certain states, or areas within a state, would pay higher, or lower, federal income taxes than under current policy.This could affect economic activity both across and within states, and indirectly affect state and local revenues. The actual impact on any given area would depend on how any changes were structured.