1. The Effects of the 2017 Tax Act on Itemized Deductions
Ed Harris
Congressional Budget Office
This presentation has not been subject to CBO’s regular review and editing process. The views expressed here should not be interpreted as CBO’s.

2. Major Provisions Affecting Itemized Deductions
Amount of the standard deduction is (roughly) doubled
New limits on specific deductions
State and Local Taxes limited to $10,000
Mortgage interest limited to $750,000 of indebtedness for new mortgages, new limits on home equity loans
Elimination of several smaller deductions
Some expansions of existing deductions
Repeal of the Pease limit
Income limit on charitable contributions increased
Lower statutory rates
All provisions expire at the end of 2025

3. The 2017 Act Reduces The Tax Preference For Itemized Deductions
Total Tax Subsidy for Deductions
2017
2018
YoY
Percent Change
Returns Itemizing (M) 49 18
-64
Itemized Deductions (B)
1,401
869
-38
Tax Value of Deductions (B)
190 61
-68
Marginal Subsidy Rate on Deductions (Percent)
2017
2018
YoY
Change
State and Local Taxes 14 1
-13
Mortgage Interest 19 11 -8
Charitable Contributions 22 17 -5