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A Tax Break for Pet Owners

January 4, 2010 - by Donny Shaw

Promoting social policy with the tax code is nothing new. The federal government gives tax deductions for first-time homebuyers, renewable energy, charitable giving and much more. Rep. Thaddeus McCotter [R, MI-11] has a novel idea for a new tax deduction. He wants to let pet owners deduct their pet care expenses to help them care for their pets in the economic crisis.

McCotter’s bill is called the Humanity and Pets Partnered Through the Years Act (a.k.a. “HAAPY Act”). It would allow owners of “qualified pets” to deduct up to $3,500 for “qualified pet care expenses” each year from their amount of taxable income.

The bill has generated a lot of interest recently. The ASPCA is asking people to write their Reps. about it. USA Today, NPR and Parade Magazine have run pieces on it. Activists are organizing around the bill on Change.org and Care2. And people are tweeting about it on Twitter.

McCotter explained his reasoning behind the bill in an interview with DoggyTV. “We’ve had reports about people having to turn in pets because of the economic recession, and it’s heart-rending to think of a child having to lose an animal they love,” McCotter said. “We’ve also seen that adoptions out of the shelters are down.” In the text of the bill itself, McCotter writes that “the human-animal bond has been shown to have positive effects upon people’s emotional and physical well-being.”

But not everyone thinks that promoting pet ownership with the tax code is a good idea. Writing at the Tax Policy Center Blog, Howard Gleckman has called the bill the “poster puppy for all that is wrong with the tax code.” The revenue loss resulting from these kinds of targeted tax breaks is already near $1 trillion annually, and at a time when we are experiencing record budget deficits, he explains. Furthermore, he’s worried about the new regulations that could come along with the bill. “Should allegedly dangerous dogs such as pit bulls be eligible?” “And what about people who abuse their pets? Tax subsidies will only help them acquire more. Do we want the IRS checking on how we treat Fido?” 

Of the thousands of bills that are introduced in Congress each session, only about 4 percent ever become law. The vast majority of them are referred to a committee, never see any action, and die. So far, the HAPPY Act has been referred to the House Ways and Means Committee, has not had any hearings and is not scheduled for any legislative action. But with 63 percent of U.S. households owning a pet, the bill has a huge constituency. If the campaign to promote the bill continues at its current pace, it could easily see some legislative action this year.

Pictured above is Yeh Yeh Pop Pop, my pet.

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