I believe the purpose of the American tax code is to raise money to fund the government. That is it. But the parties in Washington have decided otherwise. Both use the tax code to socially engineer society. Through credits and deductions, both parties try to encourage or discourage certain behaviors.
I think the tax code should have no deductions or credits. We should pay that which is necessary to fund the government and nothing more. But that is the not the world we live in. What is so mind boggling about the Republicans’ tax reform plan is that the deductions and credits they are choosing to end are the ones most beneficial to raising the next generation of American taxpayers.
The adoption tax credit saves the federal government money. It is the best example of how out of touch the Republicans in Washington are and I would be curious to see U.S. Rep. Austin Scott. R-Ga., defend scrapping this tax credit if he agrees with his leadership.
Adoptions in America cost more than $30,000 per year. In the 1990s, as the costs of adoption increased, Republicans in Congress created the adoption tax credit. It allows a tax paying family to subtract up to $13,490 from their tax bill. So, in a year that a family incurs the massive costs of adoption, they can subtract that total from what they owe in taxes, in many cases avoiding paying federal taxes that year. Unlike a deduction, which lowers someone’s overall taxable income, the credit lowers the final tax bill causing real savings.
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In a $1.5 trillion tax plan, the adoption tax credit only costs the government about a million dollars. It is a drop in the bucket for Washington, but actually helps middle class American families. Though Speaker Ryan says most families do not use the credit, there are a lot of families who do. And as the tax credit is capped on who can use it, it is not a tool for the wealthy. In fact, of the 120,000 adoptions each year in the United States, most are middle income families, who can use the credit.
The painful irony of the Republicans scrapping the adoption tax credit is two-fold. First, while they will scrap the adoption tax credit, they will continue funding Planned Parenthood. Second, the GOP claims to believe in dynamic scoring of tax policy. Under dynamic scoring, the adoption tax credit actually saves money for the federal government.
A child in state care will see state and federal government subsidies to cover their care that far exceed what the federal government supposedly loses on the adoption tax credit. Every child placed in an adoptive home is a child no longer in a government program. Likewise, children placed in adoptive homes long term have a vastly greater likelihood of successful adult lives.
Children in adoptive homes are far less likely to turn to drugs or crime than those who go unadopted. They are far more likely to have higher educations and higher earnings than those left in state care. They tend to become model citizens who then contribute more in taxes than they take in taxes.
The end of the adoption tax credit amounts to a tax increase on many middle class families. It is increasingly hard to support a party that claims to be pro-life and pro-family while it funds the abortion industry and kills off tax benefits that help place children in loving homes. There is a Democratic wave coming in 2018 and, as it stands, the GOP has done nothing to show it deserves to stay in power.
Erick Erickson is a Fox News contributor and radio talk show host in Atlanta.