Writing Off Fido and Fluffy
Ben Stein has some advice on how to get through the worst economic times since the Great Depression: Get a dog.
Now thanks to a California lawmaker, adopting a dog might be not only good for your morale, but also good for your pocketbook. In an effort to help animal shelters across the state that are teeming with near-record numbers of relinquished pets, Assemblyman Cameron Smyth (R-Santa Clarita) has introduced Assembly Bill 233. The legislation would allow California taxpayers to write off up to $100 of the cost of adopting an animal from a municipal, county, or nonprofit animal shelter or qualified rescue organization. It would become effective January 1, 2010 and last for five years.
While the tax break cannot address all that ails our homeless pets and the agencies looking out for their interests, it is a relatively inexpensive and efficient way to send a strong message to California taxpayers: that never before has their compassion been more critical to improving the chances for animals who have done nothing wrong other than prove too expensive for their downtrodden owners. AB 233 asks Californians to help out, and by promoting the benefits—to the animals and to the government and charitable sectors—of adopting dogs and cats, the deduction would increase the ability of municipal and charitable animal protection organizations to continue their life-saving work.
How can the state of California—already burdened with a multi-billion dollar budget shortfall—afford to forego the estimated $1 million per year this tax deduction would cost? The question is how can the state afford not to.
According to The HSUS’s chief economist, Jennifer Fearing, who is working to pass the bill in Sacramento, the ultimate fiscal impact of AB 233 will be driven by the extent to which Californians respond to the call to help, and the more they respond, the more positive the impact will be on local government and nonprofit sheltering costs (lower), their revenue (higher), stimulating consumer spending (more), and saving animal lives (more). Rather than distributing additional government funds to all animal shelters, a tax deduction puts the power in the taxpayers’ hands—and to the extent they choose to adopt, they will be rewarded (however modestly) by the state for doing so.
Making pet adoption fees tax-deductible will have a positive impact on the outcomes for pets who land in shelters. It is a recognized principle of tax policy that an income tax deduction for charitable donations promotes charitable behavior—often in excess of what may be expected given the actual dollar value associated with the deduction. As such, even though the dollar amount per taxpayer granted by AB 233 is small, its impact for the animals involved could be significant. Government sends a strong signal to citizens and the mere fact that an expenditure is deemed deductible increases public awareness of the behavior and of the “right” choice.
In addition to the potential for reduced local government costs associated with increased adoption rates and lower animal holding, we must also consider the tremendous economic impact of pet ownership. To the extent that AB 233 promotes pet adoptions among taxpayers who would otherwise not become pet owners, the bill could yield significant economic returns in the form of stimulated spending.
The average pet owner annually spends $1,425 per dog and $990 per cat. To stimulate as much economic activity as the estimated cost of AB 233’s tax expenditure, the new deduction would only have to prompt 4,141 new pet adoptions over five years—or 828 more per year. This is an increase of less than one-half of one percent in the number of animals adopted statewide in 2007—and certainly a modest estimate of this deduction’s impact on behavior.
Additionally, fees paid for pet adoptions go directly back to the municipality, further offsetting the costs of animal care and control. With approximately 800,000 California animals entering city and county shelters each year, with an annual cost of more than $100 million spent to house animals who ultimately are euthanized, AB 233 presents an opportunity to increase revenue to offset these significant annual local expenditures—saving tax dollars and saving animal lives.
These are tough times indeed, but by allowing a tax write-off for Fido and Fluffy, we will help ensure that they won’t be written off at the shelters. Adopting a pet can be good for the economy and good for taxpayers—but most importantly, it’s good for your soul. Many trends start in California—let’s hope that Assemblyman Smyth’s foresighted policy initiative becomes one that spreads to other states.