Should there be a tax break for pet expenses?

posted at 8:48 am on September 29, 2009 by Ed Morrissey

Last night, I received an interesting e-mail from a publicist looking to schedule interviews as part of a push for a new bill — the HAPPY Act.  No, that’s not some new twist on Hope and Change; in fact, it’s a bill introduced by Republican Congressman Thaddeus McCotter from Michigan, a reliable conservative.  McCotter and actor Robert Davi want people to get HAPPY over tax-deductible … pet expenses?

ACTON, CA – PetExemption.com founders Leo Grillo and Robert Davi are pleased that the Humanity and Pets Partnered Through the Years (“HAPPY”) Act was introduced last week in the U.S. House of Representative.  The legislation introduced by Rep. Thaddeus McCotter (R-MI) is a federal bill that would reward pet owners by allowing them to deduct up to $3,500 for pet care costs, including veterinary services.

Leo Grillo has been at the forefront of animal welfare for more than 30 years, and his sanctuary, D.E.L.T.A. Rescue, has more animals than the American Society for the Prevention of Cruelty to Animals and the Humane Society of the United States combined. It is the largest animal sanctuary in the world and the first no-kill, care-for-life sanctuary.

Actor-Director Robert Davi, best known for his roles in “Die Hard,” “License to Kill,” “The Goonies,” and “Profiler,” and directing the award-winning movie “The Dukes.”  Davi first wrote about the Pet Exemption in the Washington Times in April 2009.  “Every city in America spends tens of millions of taxpayer dollars on programs for abandoned animals. Like many government-funded programs, they overspend and underperform. By contrast, a tax exemption for pets would add to the education and rescue efforts and bring an added incentive to responsible prospective pet owners…  Let’s begin a national dialogue on this issue.”

Nearly 63 percent of American households have a pet. More than 44 million homes have a dog, and an additional 38.4 million have a cat. Most owners spend up to $1,000 each year on food, veterinary care and other costs, according to the ASPCA.

In 2008, the American Pet Products Manufacturers Association estimated that Americans spent more than $41 billion on their pets. Being allowed to use these expenses as deductions would positively affect the tax burden on a majority of American households.

Using the tax code to encourage positive behavior is a common practice. About 500,000 Americans are able to receive a tax credit for up to $3,150 for owning gas-saving hybrid cars. Many cities and states also reward hybrid-vehicle owners with access to HOV lanes and additional tax breaks. A tax exemption for pets would reward Americans for behavior they already are following to improve their health and well-being.

I like both Davi and McCotter, but this seems rather misguided, especially for a conservative Republican like McCotter.  Republicans have been demanding tax simplification, not further complication, for the last few years, and for good reasons.  The problem with the current tax code is precisely that “using the tax code to encourage positive behavior is common practice.”  Congress and presidents routinely press for tax breaks for their ideas of social engineering, which is why we now spend hundreds of billions of dollars in tax compliance.

In all of these cases, tax breaks essentially mean that taxpayers subsidize activities that get the tax break.  Taxpayers without children pay more than taxpayers with children, because we value procreation and population growth in the US.  Taxpayers without mortgages subsidize the tax breaks given to those who do, as the tax revenues have to eventually replace those lost through deductions.

Even if one grants that as a legitimate mechanism for critical economic issues, would that include pet ownership?  What critical purpose gets filled by owning a cat, dog, or a bird?  How should one family’s pet get them off the hook for taxes that others pay?

This will likely not go far, mainly due to the lack of access given Republicans in Nancy Pelosi’s House.  In this case, that’s a good thing.  Republicans need to stop contributing to tax-code complexity and unsupportable tax subsidies and focus on tax simplification.  We don’t need to get HAPPY; we need to get serious.

Update: Jazz Shaw wonders about fraud:

One other area which Ed doesn’t touch on is the question of verification and fraud. I suppose the vet bills could be tracked readily enough if we’re going to put enough people on the job, but what of the pet food and other normal household expenses? Are we to save every week’s grocery receipts for the year and mail them all in? And the IRS has to go through them all? And what of people who decide to claim they had a pet even though they don’t just for the new deduction? I can just see the IRS agents coming around to people’s homes each spring.

Jazz offers some hilarious thoughts on how an audit would go.  Like me, Jazz loves his pets, but doesn’t expect the rest of us to foot their bills.


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I didn’t know Upstater got banned. What was the issue? (Generally, so as not to compound it)

BigD on September 29, 2009 at 10:05 AM

Should all expenses for paid companionship be covered? The HAPPY ENDING Act?

exception on September 29, 2009 at 10:13 AM

Now that all my kids are grown and I can’t deduct them, I can use my cats as dependents? Sweet! One of them has cost me $2k in the last month. Where do I sign up?

:)

Bob's Kid on September 29, 2009 at 10:15 AM

So on a check stub next to FICA will be FIDO?

Jeff from WI on September 29, 2009 at 10:15 AM

Ed, you’re letting your friendship with Jazz Shaw cloud your judgment.

He’s not that good.

misterpeasea on September 29, 2009 at 10:19 AM

tax breaks essentially mean that taxpayers subsidize activities that get the tax break

Ed, your normal reasoning skills appear a bit muddied here. Tax breaks are when the government decides to not take some of your money that they had planned on confiscating. Regardless of the reason for said decision, it’s always a good thing when the people are allowed to keep more of their money. Now when you grant tax “bonuses” to people, essentially giving money to people who didn’t pay it by taking money from those who did, you’ve simply set up another welfare system, regardless of what you call it.
Your view that tax breaks are a subsidy implicitly acknowledges that the government, in your opinion, has first dibs on your money, which view I find grotesque in the extreme.

To clarify: there is an enormous difference between allowing people to keep more of their money (tax breaks) and moving money from one person(s) to another (tax bonuses, or welfare). Trying to conflate the two is dead wrong.

Physics Geek on September 29, 2009 at 10:25 AM

This is, of course, on the path to universal pet health care.

You have been warned.

ajacksonian on September 29, 2009 at 10:33 AM

Would I like a tax break for my two cats? It wouldn’t hurt. But honestly, I spend a lot less on my cats than I do my children, my husband, or even my car – so it’s not that big of a deal for me.

Personally, I think that people should adopt pets because they want one (and want to help out a homeless animal) – I don’t think that a tax break will make all that big of a difference in pet ownership.

Anna on September 29, 2009 at 10:44 AM

I have an idea. Let the pets sue for it.

Daggett on September 29, 2009 at 10:51 AM

I have 3 pets. I spend at least $1000 each per year. A tax deduction would be very nice. I treat my pets better than a lot of people treat their kids, so hell yea bring that deduction on.

angryed on September 29, 2009 at 10:51 AM

So on a check stub next to FICA will be FIDO?

Jeff from WI on September 29, 2009 at 10:15 AM

+5

It might not be your best, but it was darned good!

Laura in Maryland on September 29, 2009 at 10:57 AM

I didn’t know Upstater got banned. What was the issue? (Generally, so as not to compound it)

BigD on September 29, 2009 at 10:05 AM

He violated the no sci-fi/animal edict, but in a benign and playful manner. It has really shaken me. He usually had some very thoughtful posts, and he knew his history, econ, and constitution.

I love HA for both its bloggers AND commenters (most of them anyhow). As one from a frighteningly left-wing state, I enjoy the sense of community and the diversity of opinion. I also respect that the commenters work to keep truly hateful or dangerous crap out of the site and I agree with Ed/AP/MM for wanting a site that takes the highroad, but I never saw any hate or spew from upstater.

Laura in Maryland on September 29, 2009 at 11:06 AM

I agree with Ed/AP/MM for wanting a site that takes the highroad, but I never saw any hate or spew from upstater.

Laura in Maryland on September 29, 2009 at 11:06 AM

Neither did I — that’s why I am so surprised.

Quite frankly, HotAir is a little late to the game in deciding that they want decorum in the comments, given some of the crap they’ve allowed from people such as The Race Card and others. I think it was their sensitivity to MichelleO that did it; they certainly didn’t seem to care that much about anyone else.

BigD on September 29, 2009 at 11:11 AM

Are we taxed on our pets? If so, I’d say ok to rescind same.

unclesmrgol on September 29, 2009 at 11:11 AM

One other area which Ed doesn’t touch on is the question of verification and fraud. I suppose the vet bills could be tracked readily enough if we’re going to put enough people on the job, but what of the pet food and other normal household expenses? Are we to save every week’s grocery receipts for the year and mail them all in? And the IRS has to go through them all? And what of people who decide to claim they had a pet even though they don’t just for the new deduction? I can just see the IRS agents coming around to people’s homes each spring.

Exactly the tack the Democrats took when they chopped out a hunk of charitable deduction (which we all know is claimed far more by Republicans than Democrats); the Democrats assumed all us Republicans are lying. Now money that I would have budgeted to charity goes to taxes, and those taxes pay Planned Parenthood to do abortions.

unclesmrgol on September 29, 2009 at 11:15 AM

He violated the no sci-fi/animal edict, but in a benign and playful manner. It has really shaken me. He usually had some very thoughtful posts, and he knew his history, econ, and constitution.

I love HA for both its bloggers AND commenters (most of them anyhow). As one from a frighteningly left-wing state, I enjoy the sense of community and the diversity of opinion. I also respect that the commenters work to keep truly hateful or dangerous crap out of the site and I agree with Ed/AP/MM for wanting a site that takes the highroad, but I never saw any hate or spew from upstater.

Laura in Maryland on September 29, 2009 at 11:06 AM

Agreed, very much. I can add that Upstater can be quite naughty in a libertarian/Allahpundit way, he is a friend of mine whom I very much miss here, and his banning has made me fret about my own posting. I go off topic, as in this post. I also can have a very whacky sense of humor and be quite naughty.

I also want Hot Air to have less lies, bigotry and bullying in the comments, from trolls and from people who appear to be Obama opponents. At the same time, many of us have had many a battle here, attempting to correct lies, stop disruptions, and confront bigoted views from commenters, and Upstater was one of those helping in this effort.

Loxodonta on September 29, 2009 at 11:23 AM

But Ed, aren’t you the one that just last week told us to leave all the animal references out of our threads. How are we supposed to do that if you keep posting stuff like this?

My collie says:

You can keep your tax deductions, you silly hairless humans. We dogs have no need of them.

CyberCipher on September 29, 2009 at 11:31 AM

It probably has been mentioned but where’s the responsibility? I guess “by any means necessary” is not just for 60′s radicals anymore.

steveegg on September 29, 2009 at 11:32 AM

BigD on September 29, 2009 at 11:11 AM

I suggest you look at The Race Card’s comments again. While I disagree with many of his posts, some are spot on, he(?) sometimes expresses a great self-deprecating sense of humor, and is not a troll in my opinion. A lot of the charges of racism from the Left are pure propaganda, but there are indeed real racists on the Right, just as there are real racists on the Left. Racism isn’t dead.

Loxodonta on September 29, 2009 at 11:34 AM

FYI,
First, a caveat: I’m for the fair tax and against gov’t involvement in health care.

Now that’s out of the way: I have a child with autism. Part of the process of dealing with that is “pet therapy”, consisting of a canine & promoting actual interaction between the dog & the child. It *really* does help my son’s condition and it has been shown in study after study, to help the progression towards recovery. My son is about 90% recovered and the pet therapy has definitely helped.

So, yes, we keep up with every receipt for dog food, every receipt for the required shots, etc. It’s treated as any other medical expense. We’ve consulted with lawyers, this is already the law for patients with this diagnosis & a doctor’s prescription for the therapy. It appears that the HAPPY act would be an extension of existing deductions, IMO. No, it’s not covered under insurance. Do you guys know that only a few states even have autism covered under medical insurance? In most states, it is not. I pay for just about everything out-of-pocket & then submit as medical expenses when filling out my long form (we qualified for the medical exemption for 6 consecutive years. Do the math for YOUR situation & multiply 7.75% times your gross. I spent more than that on medical expenses for 6 straight years, mostly due to autism as it’s not covered under ANY health insurance in my state). Not whining or crying, just putting forth some facts.

rjwest21 on September 29, 2009 at 11:36 AM

I love my dogs and I think this is stupid. I’d like to see some viable pet healthcare insurance, but I know it’s not really a viable business because their life spans really make it hard for an insurance company to profit at all.

Rather than silly additions to the already monstrous and unfair tax code, lets just go to a flat tax that has some scalability behind it.

That’ll probably never happen either.

Spiritk9 on September 29, 2009 at 11:38 AM

Physics Geek on September 29, 2009 at 10:25 AM

Exactly.

Let the government reduce taxes to the level they should be (or, better, adopt a simple system like the Fair Tax), and this wouldn’t be an issue.

I would much rather spend my money on pets than on Osama Obama’s horrendous giveaways and profligate spending.

MrScribbler on September 29, 2009 at 11:48 AM

http://www.nytimes.com/2005/11/13/international/middleeast/13nukes.html?_r=1&pagewanted=all

Problem is that the Government needs revenue to run itself. If it does NOT take that revenue from one class, it will eventualy HAVE to get that revenue from somewhere else…

Thus, long run, your Tax deductions, becomes everyone elses Tax increase… eventualy.

TANSTAAFL… There Aint No Such Thing As A Free Lunch.

Romeo13 on September 29, 2009 at 11:54 AM

Spiritk9 on September 29, 2009 at 11:38 AM

Ummmm… seem to remember seeing an Ad at PetSmart for just that… Pet Health Insurance….

Romeo13 on September 29, 2009 at 11:56 AM

I’d prefer we scrap our current tax scheme and start over with something more equitable to everyone. One of my chief complaints about the IRC is that it is used as a tool of social engineering to reward some behaviors and punish others.

Having said that, as a single person with no children and three pets — two old cats and a little dog — I say . . . I’m in. I’ve been subsidizing people with kids all my working life. If we’re not going to even the playing field for everyone, then I’ll take what I can get. Whatever keeps more of my money in my own pocket is a good thing. Besides, pets are expensive, especially as they get older. I’m at the vet probably once a month now between the three of them. I joked with him the last time I was there that I need to put him on retainer.

I think, tho, that it would have to be a flat deduction or credit per household animal more so than the kind of credit described here. Most people do not itemize, therefore they don’t keep receipts. It would need to be something more along the lines of the rugrat tax credit.

NoLeftTurn on September 29, 2009 at 11:58 AM

Didn’t someone try to push a bill a year or two ago that wanted to include pets as dependents or something like that? Sorry, I do love my pets, but a pet is a luxury, not a necessity. No tax breaks.

4shoes on September 29, 2009 at 12:02 PM

You’re a little behind the times on this one, Ed.

(Original story published on 8/19/09) Despite the laundry list of pressing matters facing lawmakers these days — the recession, an unemployment rate of 9.4%, a national divide over the president’s proposed health care reform (just to name a few) — one U.S. lawmaker recently proposed a bill which would allow pet owners to deduct up to $3,500 for “qualified pet-care expenses.”

The bill, introduced by Rep. Thaddeus McCotter, R-Mich., is being referred to as the HAPPY Act, a.k.a the Humanity and Pets Partnered Through the Years Act. The HAPPY Act covers a multitude of expenses that owners of domestic animals can accrue in a given year. What it doesn’t cover is the purchase or adoption cost of the animal itself.

Enter the Backlash (emphasis added):

Kathy at Blogging For Michigan also notes that people can deduct expenses for their own medical care only if those costs exceed 7.5% of adjusted gross income, so the bill would give your pet’s medical bills better tax treatment than your own.

We love our dogs, but we think this is kind of silly. Sure, pets have gained more legal rights in the last decade or so, and aren’t simply property that you can treat any way you want. Thank goodness for that. But a tax deduction? We can imagine all kinds of problems, including how this would be enforced.

Paul_in_NJ on September 29, 2009 at 12:06 PM

First come the tax breaks, then come the mandates.

Kissmygrits on September 29, 2009 at 9:02 AM

Seriously!

And what about people who hoard animals? Wouldn’t this encourage that type of behavior?

4shoes on September 29, 2009 at 12:14 PM

I’m an animal person and have 3 dogs and 2 cats. I spend tons of money on their care. I think this tax deduction is silly.

SueM on September 29, 2009 at 12:41 PM

I suggest you look at The Race Card’s comments again. While I disagree with many of his posts, some are spot on, he(?) sometimes expresses a great self-deprecating sense of humor, and is not a troll in my opinion.

Loxodonta on September 29, 2009 at 11:34 AM

My issue with The Race Card’s comments is that they have been vulgar in the extreme. If I were to quote them, I’m sure I’d be kicked off. I complained to AllahP twice to no avail.

BigD on September 29, 2009 at 12:41 PM

rjwest21 had a very good point, that pets are often prescribed, these days, as therapy for a number of disorders — there are more therapeutic pets than most people realize, and too few recognize them as necessary. And, in many cases, the pets provide services without official recognition.

Still, rather than provide tax exemption for the critters I love, I’d be happier with a rational across-the-board reduction of taxes (flat tax would be nice).

leucanthemum on September 29, 2009 at 1:18 PM

Your government hard at work. Watching out for your…..pets. Soon pets will be able to file lawsuits. This country gets more ridiculous every day. This is what repubs are doing with their time in office these days? They are squandering opportunities as the current administration waffles on everything.

Alfresco on September 29, 2009 at 1:26 PM

So how does one define “pet”? What about other animals who live with us and depend on us for their food and wellbeing? Does Fred the turtle qualify? Do our six chickens (Agnes, Agatha, Bertha, Beulah, Beatrix, and Belle) qualify? And if we eat Agatha, do we have to declare her value in roast chicken as part of our income?

CJ on September 29, 2009 at 1:29 PM

I’ve been saying for years, about the only major difference between many conservatives and liberals, is what part of your life they want govt to control.

MarkTheGreat on September 29, 2009 at 1:34 PM

Who the heck spends $3500 a year on their pet?

MarkTheGreat on September 29, 2009 at 1:35 PM

I love my two cats, but… no.

I can definitely see a tax break for service animals, but not pets.

Mary in LA on September 29, 2009 at 2:41 PM

Problem is that the Government needs revenue to run itself. If it does NOT take that revenue from one class, it will eventualy HAVE to get that revenue from somewhere else…
Thus, long run, your Tax deductions, becomes everyone elses Tax increase… eventualy.
TANSTAAFL… There Aint No Such Thing As A Free Lunch.

Romeo13 on September 29, 2009 at 11:54 AM

Nope. Cut spending and you don’t need so much revenue.

Chris_Balsz on September 29, 2009 at 2:47 PM

No, would just send up the prices which are high enough already.

jeanie on September 29, 2009 at 3:49 PM

It blows my mind that, as of yet, no one has wisecracked about Bobby McFerrin.

Ryan Gandy on September 29, 2009 at 3:53 PM

Nope. Cut spending and you don’t need so much revenue.

Chris_Balsz on September 29, 2009 at 2:47 PM

Please point out to me ANYTIME in the Hisotry of the US, where we actualy CUT spending on a Government wide basis?

Maybe at the end of a couple of wars, as war spending ended… but certainly never during Peace time.

Romeo13 on September 29, 2009 at 4:10 PM

I can just see the IRS agents coming around to people’s homes each spring.

If they can get by my “tax deductable” pit bull terrier…….hmmmm

norm1111 on September 29, 2009 at 4:43 PM

I own four (dogs that is).
OOPS! Peta will be on my door sep for claiming to “own” them.

CynicalOptimist on September 29, 2009 at 5:20 PM

I can’t believe that there is a single conservative who does not think a tax break for pet expenses is good idea. So you would rather give that money to the government? You should get tax breaks for the ring around your bath. You pay enough taxes already, any tax break for any purpose takes money away from their government and leaves it in your pocket.

keep the change on September 29, 2009 at 5:25 PM

I am for the pet deduction. I don’t have kids and I need all the deductions I can get :-)

HawaiiLwyr on September 29, 2009 at 5:43 PM

Should there be a tax break for pet expenses?

No, its fxxxing stupid.

Now a tax break for guns….

patch on September 29, 2009 at 6:41 PM

You pay enough taxes already, any tax break for any purpose takes money away from their government and leaves it in your pocket.

keep the change on September 29, 2009 at 5:25 PM

I would agree with you, except that (1) the goobermint will just raise another tax somewhere to make up the difference and (2) I’m in favor of simplifying the tax code.

Mary in LA on September 29, 2009 at 6:47 PM

By contrast, a tax exemption for pets would add to the education and rescue efforts and bring an added incentive to responsible prospective pet owners.

How so?

While I like the idea of encouraging people to rescue pets rather than buy them, I think there are some major issues with this.
Are they talking about a tax deduction for rescued pets only? What if you go and buy an expensive pure bred, would they expect the exemption apply? What would stop animal abusers from getting pets just to claim them as a deduction?

Initially, I thought it might be a good idea for a tax benefit on the adoption costs only, they have gone up over the years and it might encourage adoption. However, again what is to stop people from adopting just to get the tax benefit and then abuse the animal, and how would anyone know if you still had the pet.

njpat on September 29, 2009 at 7:10 PM

I was expecting to hear this when I clicked….
http://www.youtube.com/watch?v=2EOZska_OLI

I guess it was an appropriate title…it was used in Must Love Dogs!

njpat on September 29, 2009 at 7:13 PM

I watched McClotter’s interview on NRO. He has a very dry wit – I think this bill is a practical joke.

AbaddonsReign on September 29, 2009 at 7:41 PM

Cash for Curs?

Dr. ZhivBlago on September 29, 2009 at 9:23 PM

My issue with The Race Card’s comments is that they have been vulgar in the extreme. If I were to quote them, I’m sure I’d be kicked off. I complained to AllahP twice to no avail.

BigD on September 29, 2009 at 12:41 PM

Sorry that I misunderstood you. Yes. That is a problem I have seen as well with his posts.

Loxodonta on September 29, 2009 at 10:03 PM

no

CWforFreedom on September 29, 2009 at 10:16 PM

I swear our cat owns us. Maybe she can take a break on her taxes

CWforFreedom on September 29, 2009 at 10:17 PM

Please point out to me ANYTIME in the Hisotry of the US, where we actualy CUT spending on a Government wide basis?

Maybe at the end of a couple of wars, as war spending ended… but certainly never during Peace time.

Romeo13 on September 29, 2009 at 4:10 PM

Straight off the top of my head, look into Jefferson’s term when he decommissioned every vessel in the US Navy. Also, during the Gilded Age we ran some hefty surpluses year after year.

Stipulating the government is going to keep growing, so everybody has to concede the govt has first draw on their earnings, is one nasty stipulation. It deserves to be challenged. It should not be a tacit basis from which to denounce a citizen for keeping more of what they create.

Chris_Balsz on September 30, 2009 at 12:09 AM

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