Thursday, September 24, 2009

Should I Be Amused Or Angry?

Should I Be Amused Or Angry?

The ASPCA is asking its members to support HR 3501, Humanity and Pets Partnered Through the Years (“HAPPY”) Act, "which would amend U.S. tax code to allow qualifying pet care expenses, including veterinary care, to be tax-deductible."

Making an expense tax-deductible, because it reduces overall tax revenues, is effectively a subsidy for a particular action. The deduction for dependents is a subsidy to having kids. The deduction for home mortgage interest is a subsidy for homeowners. The deduction for medical expenses and medical insurance exceeding 7.5% of your adjusted gross income is a subsidy for those who have serious health problems, or who have to pay for their own health insurance.

You can argue about whether each of these is necessary, or appropriate. In some ideal world, we wouldn't have any of these subsidies written into the tax code. I'm not keen on adding more tax deductions or credits into the system, except as an alternative to something worse. That's why I grudgingly support a tax credit to help lower income people afford health insurance--it's more efficient than a general subsidy to a government health insurance plan, because it is precisely targeted.

But a tax deduction for pet care? This is a frivolous subsidy at a time when our economy is in danger of collapse from insanely large deficits. I suspect that the goal is to curry favor with high income voters who call their pets "fur children," and spend thousands of dollars a year taking care of these substitutes for real children.

UPDATE: Dave Hardy points out that the proposed deduction is actually far better than the deduction for medical care or medical insurance, because your pet's expenses don't have to exceed 7.5% AGI.

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