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Source link: http://archive.mises.org/10839/be-happy-for-tax-deductions/

Be Happy for Tax Deductions

October 14, 2009 by

NPR had a story today about a bill introduced by Rep. Thaddeus McCotter of Michigan. The Humanity and Pets Partnered Through the Years Act (HAPPY Act) would allow taxpayers to deduct up to $3,500 a year for pet care expenses. It turns out that the bill (H.R. 3501) was actually introduced on July 31.

Although this is another example of Congress doing something ridiculous, it is actually a good thing. We should be happy for any and all tax deductions, credits, and loopholes in the tax code. Since about half of Americans have a pet, this deduction actually benefits a large percentage of the population. Now we just need a deduction for auto repair expenses, food expenses, utility expenses, etc.

{ 13 comments }

Jeremy H. October 14, 2009 at 6:36 pm

“We should be happy for any and all tax deductions, credits, and loopholes in the tax code.”

Is this really a pragmatic libertarian position? I know that both Rothbard and Friedman made statements along these lines, so Mr. Vance’s claims appears to be safely within multiple libertarian tents. But won’t preferential tax treatments lead to various market distortions, that will often lead to calls for more government intervention?

Two recent examples are health insurance and housing. Health insurance is taxed at a lower rate (0%) than other sources of wages, contributing to rising health care costs, which has led to calls for more government intervention into health care.

Similarly with housing, the tax code encourages home ownership over renting in various ways, e.g., the mortgage deduction and subsidies to first-time home buyers. The Fed certainly deserves much blame for the housing bubble, but we should not underestimate the importance of these tax differentials.

Nelson October 14, 2009 at 6:49 pm

I sense sarcasm. Tax deductions for specific things are merely another attempt by government officials to control our daily lives. First they take our money, then they say they’ll give some of it back if we dance for them and expect us to be happy about it.

jon October 14, 2009 at 7:14 pm

how about a tax deduction for my taxes? every year, i sit down and calculate what i don’t owe. then i deduct it.

Adam October 14, 2009 at 11:11 pm

Thank you uncle Sam :) thank you, thank you, thank you……. I really can not thank you enough for returning small part of the money you stole for me, and other hard working people. Thanks again

S Andrews October 15, 2009 at 12:50 am

Sorry for this off topic post. But this is a must watch speech from Progressive Robert Reich on health care.

http://www.youtube.com/watch?v=IT7Y0TOBuG4

Paul_S. October 15, 2009 at 1:02 am

But is is an unfair break for an unfair tax. One has to earn an income to “earn” the tax break. If government spending is not also reduced then the money must be borrowed at interest or printed out of thin air. The resulting devaluation of the dollar eats away at the savings of the unemployed. In an inflationary system wages lag behind prices. Higher prices hurt the employed but hurt the unemployed worse.

The frugal having forsaken pet ownership in order to preserve their wealth might find it beneficial to get a pet to get a tax break. But the market for vehicles over 6000 pounds dried up when the market crashed and businesses posting losses no longer needed that tax break. When the bubble popped GM was 3 years away from tooling up for vehicles that people would buy without the tax break.

Like income taxes, tax breaks were originally unconstitutional since they are not apportioned equally.

Benjamin Franklin averred, “When the people find they can vote themselves money,
that will herald the end of the republic.” Tax breaks and Federal cash rebates, the public healthcare option, Medicare, Social Security, FDIC, Federal Reserve Act, Pendleton Civil Service Act and hundreds of thousands in special interest grants and loan guarantees all attack and diminish the republic. Are we suffering from self inflicted wounds?

Working Poor October 15, 2009 at 6:57 am

Does a plush teddy bear count as a pet ?

How will the government verify that you actually own pets and that you actually feed them, send them to the vet etc.

Will government inspectors be visiting your home to see if you have pets ?

Will you have to mail all the grocery bills and vet bills to the government so they can verify your deductions claims ?

Will this apply to your 4th pet.

If my pet is a rat, a tarentulla and a snake, do they count as pets ?

Why not just cut 5% of our income taxes for everybody and let them all decide what to do with this money.

I would like to save and invest my money, I’m too poor to own pets.

Bogart October 15, 2009 at 7:54 am

Another gift from our masters. Just what we need. I have grown to disagree with the starve the beast argument. That would be a great thing if the beast did not control the value of money. But it does so the beast is going to take quite a while to starve and will destroy the real savings in the economy to keep from dying.

The only solution is to have states succeed and given the level of violence the Feds do to peaceful foreigners and pot smokers who have done nothing to them, imagine what they would do to a state full of their own citizens wanting out.

Nelson October 15, 2009 at 8:41 am

The only solution is to have states succeed and given the level of violence the Feds do to peaceful foreigners and pot smokers who have done nothing to them, imagine what they would do to a state full of their own citizens wanting out.

We already did that. The results were more Americans dead than in any other war in our History and the Federal government gaining more power over the States and the people than ever before.

Timmy Goodacre October 15, 2009 at 1:59 pm

I think a better idea would be to just apply cash for clunkers to our pets. We’ll incinerate Fido for a cool $300. Its probably time anyway, what with his arthritis and all.

Charles Hanes October 15, 2009 at 3:45 pm

I agree that lower taxes in general are a good thing, but I don’t think that targeted tax deductions like this are a good idea.

Remember that making health insurance premiums (for humans) tax deductible by businesses as a part of employee compensation was one of the major steps toward the massive distortions in health care costs that we have today. We no longer have a free market in health care, so no one really knows what it should cost.

I don’t have a pet but my brother who pays the veterinary bills for two cats reports that they are not too expensive. The reason: people pay the bills out of their own pocket, so they have to be affordable. Otherwise the providers will go out of business.

If we start subsidizing health care for our pets, we are risking having something similar happen again.

Let’s not repeat this mistake. Just call for reducing all taxes.

Ball October 16, 2009 at 7:25 pm

There is no tax deduction here.

The only real tax deductions are through spending reductions.

newson October 16, 2009 at 10:56 pm

to charles hanes:
it isn’t the healthcare tax deduction per sé that’s the problem, rather the fact that it was given to the employer, not the employee. so the healthcare consumer’s natural incentive to economize was removed.

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