The poster meant to say “as a deduction from income” rather than as “income.”
Most but not all social services agencies take the view that before you ask for a handout, you should give up luxuries such as non-public education. Whether ownership of a car or a house is taken into account is similar.
We should also remember that to the extent the government recognizes Torah education, it will also want to regulate and often in ways we find highly objectionable (remember the government, especially in “blue” states, regards opposition to certain behaviors we can’t talk about on YWN as being “hate crimes” against those who engage in such behaviors). We really should not be anxious to be “helped” by the government. Torah Judaism wants autonomy, not a seat at the table.