Tax Breaks for Pets: An Idiotic Idea?

(MoneyWatch)  Back in the mid 1980s, when the IRS started requiring Social Security numbers to claim a dependent, some 7 million kids disappeared from the nation's tax rolls. The speculation was that taxpayers had been claiming their pets--"Fluffy Johnson"--as personal exemptions but didn't have the nerve to try to get them Social Security numbers to keep up the fraud.

Now a California actor is trying to change U.S. tax law to make claiming a pet a legitimate deduction. The bill, called Humanity and Pets Partnered through the Years (to gain the acronym "HAPPY"), would provide up to a $3,500 deduction for pet care expenses. Pushed by actor Leo Grillo, who is in "Zyzzyx Rd," the upcoming film "Magic" and appeared in several episodes of "Banacek", the bill was introduced this summer and awaits hearing in the House Ways and Means Committee.

Grillo also runs Glendale, Calif.-based D.E.L.T.A. Rescue which stands for Dedication and Everlasting Love to Animals (this man loves acronyms). He acknowledges in a press release that federal and state government budgets are tight. But he says that providing a new deduction for pet care is just the ticket for bad times like these.

"People are depressed," Grillo said in a press release. "Pets help them to live and are sometimes the only beings that show these people love. People who live happily and are productive are good for the economy and the country. Therefore, this bill not only saves pets, it saves people."

Sure. The logic is irrefutable.

Before I go on, I need to say that I am a dog lover. I have two border collies (who, I discovered today, hate having their pictures taken). But this notion is idiotic.

Here's the deal: Every time you give one group of people a deduction or credit, you require that some one else give one up. Alternatively, you could raise tax rates on everybody to boost the revenue that you're losing by giving dogs a deduction. But, why?

Already the tax code favors homeowners over renters; parents over those without kids. We favor those who pay to send their kids to college; who buy health insurance; and people who work, but don't make a lot of money.

Most of these breaks can be justified with some sort of economic benefit. For instance, homeowners buy furniture, hire people to repair their plumbing and lights and mow their lawns. If people didn't have children, there would be no one to fund our future Social Security benefits. College? An educated worker earns more and pays more in income taxes. Poor people who work? Well, do you want to give them a tax break or welfare? Pick one.

But pet owners? How to they benefit society as a whole? I'm not seeing it.

And since some 63% of US residents have a pet (according to Grillo), I'm thinking that giving me a deduction to feed the pooches is going to cost Uncle Sam a pretty penny. The deduction isn't just for dog-owners, by the way. It would apply to any one who has a pet that's "legally owned, domesticated and alive." (Seriously. The emphasis is mine, but I did not make that up. I'm not that funny.) You'd get to write off the cost of food, veterinary care and pet insurance.

"This way, owners will have more discretionary income to take better care of their pets," Grillo said in his press release. "And we think there will be a demand for pets since they will be more affordable."

Grillo maintains that millions of people are supporting his legislation, and says he can't imagine what pet lover would argue against it. (Except me, I guess.)

What do you think? Should we take deductions away from college students to give them to people with cats?