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We Love Pets At the Tax Foundation, Honest

2 min readBy: Joseph Bishop-Henchman

As we noted back in August, Rep. Thaddeus McCotter (R-MI) had introduced H.R. 3501, the “Humanity and Pets Partnered Through the Years” (HAPPY) Act, which would allow taxpayers to deduct up to $3,500 per year in pet expenses from their federal taxes. Parade this weekend has a cute puppy alongside an interview with our Bill Ahern, who argues that it’s just a feel-good idea designed to curry favor with voters but ultimately unjustifiable and complex.

The happy puppy all but loses the argument for us and the letters have been pouring in, but let me try with some reasons why pet-loving Americans shouldn’t support the idea:

  • “Everyone else is getting favors so I should get some” is at the core of all bad fiscal policies.
  • People shouldn’t get pets just because the taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. code encourages them to do so. In fact, such people would probably be the worst pet owners. I’d hate to see loving pet owners become dependent on the government for their pet care.
  • Politicians should use the tax code to raise revenue, not to shape people’s behavior in ways they think is nice. If you want to cut taxes, cut taxes. But this type of targeted tax break is precisely the thing that mucks up the tax code and adds complexity and uncertainty. (Check out the mocked-up Individual Pet Tax Return (Form W-K9) for some insight as to why.)
  • I don’t want the IRS spending its time scrutinizing whether that my purchase of a new can of Fancy Feast or new chew toy or new fish tank castle “qualifies” for the deduction, as MSN noted. The deduction will end up being so broad it bankrupts the government or (more likely) so narrow that it will be useless.
  • A federal government program for pet expenses would never fly, yet this bill would achieve the same thing via a less-scrutinized tax deductionA tax deduction is a provision that reduces taxable income. A standard deduction is a single deduction at a fixed amount. Itemized deductions are popular among higher-income taxpayers who often have significant deductible expenses, such as state and local taxes paid, mortgage interest, and charitable contributions. .
  • The deduction for children was wildly abused before the IRS required Social Security numbers for each dependent; the year after it was required, 7 million children “disappeared.” Preventing fraud in declaring pets would be extremely difficult to administer.
  • Kathy at Blogging For Michigan also noted that people can deduct expenses for their own medical care only if those costs exceed 7.5% of adjusted gross incomeFor individuals, gross income is the total pre-tax earnings from wages, tips, investments, interest, and other forms of income and is also referred to as “gross pay.” For businesses, gross income is total revenue minus cost of goods sold and is also known as “gross profit” or “gross margin.” , so the bill would give your pet’s medical bills better tax treatment than your own.