Republicans to Kill the Adoption Tax Credit
They claim to be the pro-life, pro-family party. But Republicans in Congress are starting to show they only care about lobbyists and money. Though they continue to fund Planned Parenthood, the Republicans have decided to kill the adoption tax credit.
Let me start with the basics. I believe there should be no credits or deductions in the federal tax code. The purpose of the tax code is to generate revenue to fund the federal government. But both Democrats and Republicans use the tax code for social engineering. Through the use of deductions and credits, the two parties try to incentivize and de-incentivize various behaviors.
More often than not now, the behaviors Congress seeks to push or restrain are based on lobbyist contributions. The more money a Fortune 500 company or union contributes to Congress, the more likely Congress will add or subtract something from the tax code. But it seems that if Congress is going to use the tax code for social engineering, what it should be social engineering is a healthy society of stable two-parent nuclear households. Children raised in those households grow up to be the most productive members of the society providing the steadiest stream of revenue to fund government. Produce more children raised in stable, two parent households and grow the tax base over time.
Instead, Congress is focused mostly on deductions and credits for businesses. That misses the mark. The adoption tax credit actually saves the federal government money long term. The Republicans are always talking about dynamically scoring budgets and taxes based on their benefits and costs. It costs the state and federal governments more money to have a child in state care than in an adoptive home.
The adoption tax credit is also a rather small cost to the tax plan. The Republicans’ proposed tax plan will give up approximately $1.5 trillion in taxes. The adoption tax credit is only around a million dollars. Speaker Paul Ryan says it is a tax cut for the wealthy. Most children are adopted into lower income families who pay no taxes and therefore cannot get the tax credit. But this misstates the issue.
The adoption tax credit gives individuals up to about $13,000.00 in credit for taxes paid. So for each dollar paid in taxes, a family can subtract out up to the maximum amount of the credit for an adoption. With average adoptions in the United States exceeding $30,000.00, a good many people can wind up paying no taxes in the adoption year. While $13,000.00 may not seem like a lot of money, it certainly eases the finances of adopting parents and it eases the emotional strain knowing it is there. People who exceed roughly $200,000.00 in annual taxable income cannot take the credit.
Speaker Ryan’s defense amounts to class warfare. The state should have an active policy of encouraging adoptions. Saying the adoption tax credit is just for the rich not only misstates the truth, but also gives no benefit to those who do take children off state care into private homes. We should want more people doing that. There is no better proof that the Speaker is misguided on this than that the adoption rate has increased in the country since the adoption tax credit came into being. Many, many people depend on it and they are middle class families, not wealthy families.
To find out more about Erick Erickson and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.