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Tuesday, October 13, 2009

Tax breaks for pets are a bad idea

Animals are great. Pets are great. Who doesn't love dogs? I've always been skeptical of cats, which would eat you if they were big enough. But pets are a wonderful and valuable thing. That doesn't mean we should pay higher taxes so that our neighbors with pets can get a tax break.

One of my favorite Congress, Thaddeus McCotter, is teaming up with one of my favorite Bond villains, Robert Davi, on a truly bad idea; tax breaks for pets.
"What a pro-active way to be able to help the economy and change the culture in this country around animals," Robert Davi, a veteran actor ("The Goonies," "Die Hard," "License to Kill") who was a main force behind the bill's introduction, told ABCNews.com in a telephone interview.

"This money goes back into the economy, and it encourages people to understand the social responsibilities we have toward animals," Davi said.
McCotter is sponsoring the HAPPY Act, which stands for Humanity and Pets Partnered though the Years. It would allow taxpayers to fully deduct the cost of pet care expenses from their taxes, capped at $3,500 per year. This would include veteranary care, meaning that health care expenses for pets would be deductible, but health insurance premiums for the self-employed would not. It excludes the actual cost of acquiring a pet, but would presumably include pet food, pet toys, and pet beds. An officially licensed New England Patriots pet jersey? Tax deductible.

According to the bill's findings, 63% of American households own a pet. That means 37% of us would be paying higher taxes to lower to cost of pet ownership for the rest of us.

We like tax cuts. Government takes too much money out of the economy, and leaves too little in out pockets. But this bill isn't really a tax cut. It's a tax expenditure. It uses to tax code to promote one kind of behavior, pet ownership, at the expense of everything else. People love their pets, and spend lots of money on them. Carving out a piece of the tax code for 63% of American households certainly sounds popular. But why not just reduce spending, reduce marginal tax rates, and leave more money in everyone's wallet? They can put it towards the care and feeding of Fido, their kids' college fund, or a weekend in Vegas.

The bill has been sitting in a drawer in the Ways and Means Committee since July, and isn't likely to see the light of day anytime soon. In the end, it will probably just be a nice way for McCotter, a Republican from Michigan, and his only co-sponsor, Tennessee Democrat Steve Cohen, to suck up to pet owners and claim that they are fighting for lower taxes. But bad ideas are bad ideas, and should be challenged.

1 comment:

  1. Until pets pay taxes this is a ridiculous idea.