Like all of the readers of this publication, I spent time in the last few months preparing my federal and state income tax returns. I actually prepared two versions of the returns, first my regular return and then a return with my housing subsidies removed.

Yes, I did say housing subsidies. As homeowners, my wife and I dutifully deduct the interest we pay on our mortgage and home equity line of credit. We also deduct the real estates taxes that we paid to the county and the city of Poway. The net effect of these deductions was that the federal and state governments reduced our family’s income taxes for 2006 by $5,200. This is for a household of two that earns in the top 2.5 percent of households in the country.

And this is low for our income category because we don’t have the maximum mortgage that we could have and we bought our house 15 years ago and are currently paying taxes on about 35 percent of its market value.

That same subsidy would enable a single mother of two working full-time as a waitress to rent a two bedroom apartment in San Diego and pay only 30 percent of her income for rent, leaving her with sufficient funds to provide a decent diet for her kids, be home to help with their work and pay for healthcare.

This woman works as hard as I or my wife have ever worked at a job that is less satisfying. Yet we get a big tax break and she gets, at the most, a $120 tax credit from the state of California.


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