Who benefits from tax expenditures? This varies widely by item. As seen in the figure above, of the seven precisely measurable tax expenditures worth over $20 billion, three accrue disproportionately to households earning over $200,000 a year. The largest such is the mortgage interest tax deduction, costing the government over $80 billion a year. It is less a means of encouraging home ownership than a means of encouraging the well-off to borrow more than they need to buy bigger homes than they need. American legislators should summon the courage to follow the British example and phase it out.