tax day

I have to tell you that tax day is not a happy day for us. As a pastor, we pay quarterly paymets so even with the best of planning, we still have to pay a chunk of money. If something didn't work correctly through the year, we pay a chunk for two years. All of that is depressing but there is more. There is a piece of the tax code that I try to ignore for most of the year but when we finally do our income taxes, I am faced with it.

We owned a home in Albany. It was one of the least expensive places to purchase a home and in the 14 years we were there, we saw almost no appreciation in the value. Still, it was a great house and there are other benefits to owning as we later came to appreciate. In California, we live in a parsonage. Owning a home was out of the realm of possibility here because property values are completely out of whack. What we hadn't really figured out though, was that the difference of not having the mortgage payment would cause our taxes to just about double.

Purchase a house and you get to deduct your interest (which just happens to be the biggest part of your house payment for most of the life of the mortgage) and your property taxes and because that pushes you well past the standard deduction, you get to deduct all of your charitable giving too. It ends up essentially being a government subsidy as you hopefully build equity while you are receiving a huge tax break. And the bigger your payment, the bigger the deduction! Rent... and you get none of that. No tax break. No equity. Nada.

So who lives in rental housing? Folk who can't afford to purchase property. So once again the haves get the breaks and the have nots get... fill in the blank.

And I know that was part of the driving force behind many poor folk getting in over their heads in the housing market... they thought that finally they could get their leg up. That just adds to the ambivalence I mentioned in the earlier posting.