"Why Require Only Poor To Do Community Service?" by Peter Dreier

Why require only poor to do community service?
By Peter Dreier
USA Today

Starting Oct. 31, the Bush administration will require unemployed adults living in public housing to contribute eight hours a month of community-service work or face eviction. Public housing agencies across the USA have sent letters to tenants informing them of the new federal mandate.
In theory, this is a good idea. But if President Bush is serious about encouraging the spirit of volunteerism, he shouldn't limit his plan to the poor people who live in public housing. They represent only a tiny proportion of people who get housing assistance from Washington. Most beneficiaries of federal housing subsidies are wealthy, or at least in the upper middle class. And they get their subsidies not from the Department of Housing and Urban Development (HUD) but from the Internal Revenue Service, in the form of tax breaks.

The HUD budget for low-income housing is about $31 billion. Subsidized housing for the poor is essentially a lottery, not an entitlement; only about a third of the families eligible for federal housing assistance receive any subsidies. This adds up to about 5 million households, 1.1 million of whom live in public housing.

In contrast, tax breaks for homeowners — the deduction of mortgage interest and property taxes — cost the federal government more than $88 billion last year. About 33 million homeowners took advantage of these tax breaks. That would be OK if most of it helped the middle class. But those with the highest incomes and the most expensive homes (including second homes) get the largest subsidy.

Rich returns
The average annual mortgage-interest tax deduction:
Income: Value of deduction
Below $10,000: $83
$10,000-$20,000: $386
$20,000-$30,000: $421
$30,000-$40,000: $596
$40,000-$50,000: $906
$50,000-$75,000: $1,205
$75,000-$100,000: $2,111
$100,000-$200,000: $3,145
Above $200,000: $6,905

Source: Joint Committee on Taxation

More than half of the $66 billion mortgage-interest subsidy goes to the richest 11% of taxpayers with incomes above $100,000. This alone is bigger than the entire HUD budget. More than one-fifth of the mortgage tax break goes to the richest 2.25% of taxpayers, those with incomes above $200,000.

Overall, 22.5% of taxpayers take the mortgage interest deduction, but the percentage varies significantly with income. For example, 62.5% of taxpayers with incomes above $200,000 took the deduction, with an average tax benefit of $6,905. In contrast, only 26.7% of those in the $40,000-$50,000 bracket took the deduction; they saved an average of $906 on their taxes. Among those in the $20,000-$30,000 income category, only 9.4% took it, receiving an average benefit of only $421.

The Bush administration isn't requiring homeowners who receive tax breaks — whether employed or not — to do community service. But it is forcing jobless low-income adults fortunate enough to live in government-subsidized housing to do volunteer work or face eviction.

The reality is that most poor people do work. The ones who don't are taking care of their children or can't find a job. In the three years of the Bush administration, the unemployment rate has increased, making it more difficult for public housing residents and others to find work. Rather than force them into community-service efforts, Bush should focus on improving the economy so that able-bodied people who want to work can do so. Moreover, many public housing residents already volunteer for their churches, help family members and friends take care of children, and participate in other forms of community service.

The Bush administration claims its mandate will encourage people in subsidized housing to give back to their communities. If Bush really believes this, why not require all Americans to perform community service based on the size of their federal housing subsidy? Then, when America's super-rich mail in their income tax forms with those huge deductions for their year-round mansions and getaway vacation homes, they also can look forward to volunteering their free time to make America a better place, just like those unemployed folks in public housing.

Peter Dreier is a professor of politics and director of the Urban and Environmental Policy program at Occidental College in Los Angeles.

Article Link