Do tax breaks for pet healthcare make you HAPPY?
Think you deserve a $3,500 annual tax deduction for "qualified pet care expenses"? Think about it. This tax deduction could effectively mean that up to $3,500 of your pet food and veterinary expenses will be 10 to 30 percent cheaper (the degree of savings would depend on your tax rate).
Considering that most responsible pet owners spend about $1,500 every year on their pets , such a proposal might help each individual, or family, support about 2.5 pets a year in the manner to which they’ve become accustomed.
Representative Thaddeus McCotter is the man behind the drive to pass a resolution in favor of such a tax break. He’s is sponsoring the proposed legislation for the Humanity and Pets Partnered Through the Years Act (commonly referred to as the "HAPPY Act").
But back to the initial question: Do you believe pet owners like YOU deserve a tax break for your pets?
In spite of the fact that veterinarians stand to benefit financially from tax breaks applied to the services they supply, you might be surprised to learn that not all of us agree that tax breaks like this are worthwhile.
After all, tax deductions like these tend to benefit those of us who already itemize our expenses, hire accountants to do the heavy lifting and earn incomes worthy of higher tax brackets. In fact, the higher our incomes, the more we stand to gain from this legislation.
So why would the US Treasury want to leave all this money on the table? Is it because our government wants to provide incentives for higher quality pet care? Because pets are family and, as such, pet owners deserve write-offs just like human parents do?
Ostensibly, yes. That’s the idea, anyway. But would offering incentives to those who already care for their pets actually make a difference in the kind of pet care animals receive? Is it fair to allow "pet parents" to save on pets in the same way "regular parents" do?
Ultimately, it’s my take that the sentiment behind this kind of legislation is right on target. If people treat their pets like family and derive both tangible and intangible benefits from keeping them, then supporting their maintenance and care through broad-based public policies benefits makes sense. Anything that raises the quality of life is a good thing.
The problem, however, is that we cannot devise public policy based on sentiments alone. No matter how important we believe pets to be, policies that support their care and well-being shouldn’t be implemented if they’re so poorly designed that society doesn’t actually stand to benefit from them.
Let me explain: It’s my view that changes in tax policies, specifically those that target tax savings with a very specific goal in mind, should effect an actual change in human spending behavior on that very issue. And I don’t believe this one will.
Consider: Will financially strapped owners spend any more on their pets if they know they can deduct $3,500 off their earnings at the end of the year? If they don’t stand to earn enough to pay any taxes it’ll make no difference to them. If they don’t have enough cash or credit on hand to pay for the needed products or services, it’s also useless. If they make enough to spend the money, whether or not there's a tax incentive, it's similarly unhelpful (in a benefit-to-society kinda way). In fact, it’ll only alter the purchasing decisions of a small sector of the pet-owning population; i.e., those who know about this tax relief, make enough to pay up front and are thoughtful enough to weigh the pros and cons of a veterinarian's recommendations with an eye towards a year-end savings.
Then there’s the issue some naysayers like to raise: Why should we effectively fund the pet care of so many owned animals when so many others languish in underfunded public shelters? Given this reality, can’t we find another way to support animals with these monies?
Sure. But ultimately, the HAPPY Act is not about supporting animals. It’s about supporting families. And unfortunately, it’s my view that it does neither.
Dr. Patty Khuly