recent comments by Mitt Romney about the 47% of people in America who don't pay federal income taxes, that they are "dependent upon government, who believe that they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it. That that's an entitlement. And the government should give it to them. . . . . And so my job is not to worry about those people—I'll never convince them that they should take personal responsibility and care for their lives."
There's also been a lot of attention paid to some groups in that 47% -- like seniors, active-duty military, the working poor (those earning less than $20,000), thousands of millionaires, etc. I was curious, though -- how many in that 47% are adoptive parents who have utilized the adoption tax credit and thus pay no taxes. I couldn't find any figures for how many adoptive parents take advantage of the adoption tax credit each year, much less how many use it to meet their entire tax obligation. . . .
So I took a look at the tax tables for 2011, looking to see at what income level a person's taxes would have been completely paid by the $13,360 adoption tax credit. I was actually a little surprised by how high that income was -- a single person taking nothing but the personal exemption of $3650 and the standard deduction of $5800 could earn up to $78,400 and not pay a penny of federal taxes because the adoption tax credit covered their tax obligation. A married couple taking nothing but the personal exemptions of $7300 and standard deduction of $11,600 could earn up to a whopping $103,350 and not pay a penny of federal taxes because the adoption tax credit covered their tax obligation. AND the adoption tax credit is refundable -- meaning that if your tax obligation is less than $13,360, you get the balance as a refund! Government handout, anyone?!
Of course, the adoption tax credit is a one-time thing and doesn't seem to suggest some long-term dependency, right? But then, we don't know whether that's true for the rest of the 47% as well. All we know is that in any given year a certain percentage of people don't pay any federal income taxes, not how long they haven't paid any income taxes. And don't get me started on adoption subsidies that do last year after year. . . .
So, if you're disturbed by the specter of 47% of Americans not paying federal income taxes, then it's time to get rid of the adoption tax credit, right?! In fact, those of us who took the credit in the past should be ashamed of ourselves for taking that government handout, for our dependency on the government, for sucking at the government teat. Right?!
Hmm, I'm not sure many adoptive parents would agree to that.
So when you look at the 47%, remember that one person's "dependency" is another person's deeply-prized tax break. . . .