Of Adoption Tax Credits and Fiscal Cliffs

Clayton Milano

There has been much clamoring surrounding the fiscal cliff of late. Interest groups of every shape and color want to make sure they aren’t the ones to feel the blunt force of spending cuts or tax increases. One interest group has caught my eye amidst the commotion. This is the adoptive families interest group. For months now, politically active Christian groups have been raising quite a stink about the adoption tax credit (standing near 13k) expiring at the end of 2012. I’m not so sure I can join the vocal protest. Let me explain why.

In short, many pleas by various Christians posit views that are remarkably shortsighted when it comes to ethical issues surrounding taxation, the roll of government and private property. This in turn causes them to evaluate the adoption tax credit (though the same issues surround other tax credits) rather one-dimensionally.

First it must be addressed, how the monies for the adoption tax credit (or any other tax credit) is collected. In his book the Ethics of Liberty, economist Murray Rothbard sums up the situation rather simply:

Only the State obtains its revenue by coercion, by threatening dire penalties should the income not be forthcoming… Taxation is theft, purely and simply even though it is theft on a grand and colossal scale which no acknowledged criminals could hope to match. It is a compulsory seizure of the property of the State’s inhabitants, or subjects.

What is important to note about Rothbard’s quote is that monies to pay for the adoption tax credit are taken by coercion. It is done by force. The government forcefully takes money from one and gives it to another. The fact that monies are in essence stolen from other citizen’s to help pay for adoptions is a moral dilemma of the most serious kind.

 But the ethical dilemma of implementing an adoption tax credit does not end there. Not when one considers property rights, something ultimately grounded in the second table of the law, which is known by way of conscience (Romans 2:14-15). Once the taxes have been collected, it should not be forgotten that the monies received by family A is property that was stripped from family B. I repeat, money received from an adoption tax credit is ultimately the property of another.

 So why is this perspective scarcely if ever brought into the discussion on the adoption tax credit? The chord that ties these seemingly disparate strands together is the remarkable coldness of the overall tax system. People are meant to feel removed from the system. They just give their money to the government, their conscience is eased and they go about their daily lives. It is this fact that allows so many Christians writing on the issue of the adoption tax credit to make a complex issue so incredibly, yet inaccurately, simple.

In a Christianity Today article, Bethany Christian Services director Bill Blacquiere argues that the government has a vested interest in continuing the credit. Mr. Blacquiere then goes on to discuss how the credit saves the government money by incentivizing adoption since this will remove kids from the foster care system and ultimately reduce costs to the government. With some emotional distance from the tax system, it is easy to see how we just skip the meat and potatoes of the ethical question and move right to the pragmatism. But who has a vested interest in seeing that a culture of coercive force is continued? Or who has a vested interest in seeing their private property stripped from them against their will only so that it can be given to another for some “greater cause?” It is only because Mr. Blacquiere forgets that the revenues, which pay for the tax credit, were first the private property of another that he reasons along such lines.

You may now suspect that I am not a big fan of adoption; that I have forgotten the simple truths of spiritual adoption and their corresponding earthly analog. This is not the case. My wife and I hope to adopt a number of children. I don’t know where the money will come from, especially if the adoptions are international. But one thing I am certain of, the money should not come from another’s private property via government coercion. 

Clayton Milano
Clayton is a former regular contributor to The Two Cities.

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16 responses to “Of Adoption Tax Credits and Fiscal Cliffs”

  1. Matt Wilcoxen

    I have to register the strongest disagreement with this post. Your premise–that any government taxation is coercion–is glaringly simplistic and entirely unjustified, both philosophically and theologically.

    Reply
    1. Ryan M

      Not surprised by the disagreement. Glad you are back on the blog, man. Anyhow, my follow on questions would be, what taxation do you consider to be coercive? It seems that in your comment, that you do allow room for some taxes to be coercive. Is that right? If so, how do you determine which ones are coercive and which one’s aren’t? And what would you use as a definition for coercion? Not trying to get into one of our heated back and forth debates. Just some questions. I’d be willing to defend my stance on taxes both philosophically and theologically if you want to defend yours. I recognize it may be a long detailed interaction.

      Reply
      1. Matt Wilcoxen

        Let me restate my objection.

        I don’t know if or when government taxation is “coercion” in the sense of theft. I guess it’s always “coercion” in the sense of something that’s non-optional. Perhaps you could spell out *why* all taxation is coercion in the stronger sense of thievery? It seems to me that the underlying logic of this would be so radically individualistic as to be anarchic at its core (not just merely “libertarian”). You would essentially be arguing against the validity of *any* laws and *any* government, because under such a schema, the very notion of government is such that it is inherently a restriction of freedom.

        I really think you’d have a hard time convincing people of this anarchic view, even on a purely philosophical level. I think it would be virtually impossible to defend this assessment of government and this definition of freedom on a biblical and theological level.

        Reply
  2. Tim

    Interesting argument regarding the coercive nature of our tax system. But I think it says something of the nature of the taxPAYER as well. Without coersion, we probably would not willingly step up and pay our “fair share” to cover the cost of government spending (look at Greece). Maybe that would be a good thing since it would force government to deal with some wasteful practices… but I digress. We are bound to find some kinds of government expenditure upsetting, especially when we still think of the tax dollars paid in as “ours.”

    Tax credits are really nothing more than expenditures even though they oddly end up written into the tax code. So if we are to look at government expenditures like the adoption credit as nothing more than a forceful taking of someone’s property to subsidize another’s adoption… then we must also look at ALL government programs as being no more than that. Food stamps. Unemployment. Social security (especially now when younger taxpayers might not see much). The list is miles long. What government aid program is NOT the forceful taking of funds from the whole for the benefit of the few?

    Finding the validity in those programs often comes down to a couple of things: the moral importance of bearing one another’s burdens and the potential ROI from a governmental viewpoint. These are the things that Bethany Christian Services director Bill Blacquiere is addressing. The fact that the revenue to support certain tax credits was originally the private property of another is probably not on his mind since it’s a premise of the entire tax code and every single governmental expenditure from foreign aid to legislator pay to military spending to food stamps.

    I happen to see Blacuiere’s pragmatic points regarding the benefits of adoption to society (thereby making it worthy of subsidizing). Besides lifting a burden from the foster care system, it also increases the liklihood that the children adopted will become productive future taxpayers. In the case of international adoption there is tremendous appeal in increasing our taxpayer base in terms of raw numbers (look no further than social security as an example why). The cost of the adoption tax credit is a drop in the bucket compared to its returns, let alone the cost of other programs.

    Don’t forget… adoptive parents, besides being those who are putting the very fabric of their families at risk by taking on the unknown challenges of adopting those in need of homes, are also taxpayers who put in what’s required of them on a yearly basis (coerced or otherwise). The cost of doing something so magnanimous as adopting is unfairly high considering the goal of giving essentially homeless children a family. I see the tax credit as a fair and intelligent response by our government.

    Reply
    1. Ryan M

      Tim,

      Thanks for responding to my post. And thank you for responding to charitably. I really appreciate it. A couple brief comments:

      1. You are going the direction that the discussion needs to go and for that I commend you. This isn’t just an issue of the adoption tax credit. It’s an issue the touches on the role of government, property rights, etc. As such it is a larger question. I just happened to use the adoption credit issue as a spring board to that larger question. When you comment that Blacquiere was not thinking of the entire tax system, I believe you are correct. But in order to find the foundations of a moral society we need to look at the whole system. I understand that he is operating on the assumption that the system is either a.)acceptable as is or b.) just the way things are and thus working within a framework which he himself cannot change.

      2.) You mention the importance of bearing one another’s burdens and the issue of societal benefit in adoption. Both of these you point to as reasons for allowing/continuing the subsidy. Without getting long-winded, I do not believe that it is a function of government to help bear other’s burdens or to determine what is good for society beyond the enforcement of natural law and contract law. Those should be government’s sole duties. This thought process in borne out in some of my other writings on this blog regarding the two-kingdoms framework. This theological framework is what leads me to make the comment that I just made. Suffice it to say. Though before I be accused of not caring about these things The French economic philosopher Fredric Bastiat sums up my thoughts well when he says:

      “Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.”

      I don’t think you are a socialist nor do I believe that you think I am a cold-hearted loon. I post this quote only to add some meat to the conversation regarding to my objections of government funding something as worthy as adoption.

      Reply
    2. Ryan M

      One other thing I should add Tim,

      I think if you have paid 13k of your own private property to the government, you have every right to take the tax credit. You are just retrieving what was taken from you in the first place. The moral dilemma comes in when you haven’t paid 13k to the government coffers becuase now you aren’t getting your own money back.

      Unfortunately, the amount of words I have to write an article for the blog are limited and thus some important nuances get left out. This is probably the biggest thing that I regretted not putting into the body of the post.

      Reply
      1. Tim

        Ryan,
        Thanks for the additional comments. Right off the bat I wanted to address the $13K-of-my-own-private-property thing. The tax credit is at this point non-refundable meaning that if you put in, say, $8K in taxes in a year and then submit for the tax credit, you will not receive a credit for the $8K AND an additional $5K as a refund – you will only receive back the $8K you put in. The credit, however, can be carried over to the next year to allow you the balance of the full benefit in terms of “reclaiming your property,” as it were. So where I may get nearly the whole shot back in one year, someone who pays in less won’t receive more than they put into the tax system as you fear. That may relieve you of the moral dilemma you wrestle with in this particular case.

        You really raise some interesting points to think on regarding taxation and the contract that we have with our government. I admit often feeling a bit “robbed” when I think over my taxes, how much is taken from my pay without my expressed consent and the fact that I will never truly own my home (ie – even if I paid for my home outright, if I stop paying my property taxes they will take my home away). So I don’t think you’re crazy for thinking the way you do.

        I also hear where you’re coming from on what you feel should be the strict role of government in the contract between it and its citizens. In reality this contract has become less like the contract it started as and more like those “take it or leave it” user agreements offered by software companies and wireless service providers. We are buried in an imperfect mass of bureacracy, so on the day to day we are forced to make the best of it and take the credits that we can.

        That all said… I am a bit divided over the good of some of our government’s social programs. On one hand I see and read about such collossal waste and poor judgment that it can be a bit maddening. On the other hand I see such amazing efforts to help, clothe, shelter and care for “the least of these” when they are down that I cannot help but draw comparisons to some traditional roles of the church. And anytime I see government acting in a Christ-like manner, whether or not they are motivated by His precepts, I say “God Bless it.” Even if I don’t have a choice.

        I may have preferences on missionaries and community programs for my church to support or not support, but I don’t always have a voice in that decision process either. It’s not the least of the reasons why it’s so important to remember our leaders when we pray.

        Reply
  3. Jesse

    Your argument would be well grounded if your initial claim held any type of water whatsoever. To state that taxation is theft is as far right as you can go, and simply put, completely wrong. My taxes pay for things that benefit me, but they also pay for things that benefit the society I live in as a whole. Taxes fund our military, government institutions that keep citizens safe, humanitarian organizations, and much more. I pay my taxes happily because I understand that.

    In specific, the adoption tax credit allows for families who would love to adopt a child but don’t have the financial ability (adoption is EXPENSIVE) to remove money from the equation, and simply consider the child. You are not paying a family to take on a burden – you are removing a barrier. This does good for all of society. To state that the adoptive family is receiving property that was “stolen” another family is not only farcical, but ridiculously self-centered. If you have a problem helping other people by sacrificing some of your pocket money, then buy an island and found the United Republic of Ryan M .

    Reply
  4. Carrie Allen

    Ryan, I also disagree with what you’re saying here, but we’ve had these discussions before. I think it’s fair that you disagree, and I see where you are coming from. In the coming year I would really enjoy hearing from your Libertarian perspective on what a Libertarian government would look like to you as far as military spending, or even taxation to pay for firefighters and police officers in every city.

    When I think about big cities, and impoverished cities like Oakland, Detroit, and Newark, I can’t imagine how a Libertarian government would work. But I am open to thinking about it! I would like to hear some of your ideas.

    Reply
    1. Ryan M

      Carrie,

      Thanks for charitable response though I know you don’t agree with me. I hope to touch on these issues, but it’s hard to do in these brief posts especially because I draw heavily on a two-kingdoms framework to arrive where I do. Hard to tie all those strands together.

      Reply
      1. Carrie Allen

        Yes, I totally hear what you’re saying. I just feel like all of your two-kingdom stuff doesn’t give me actual options to hold in my hands. So, I really hope you will be able to write more for me to learn from in 2013.

        Reply
  5. Brent

    Are we to live like the early Christians? They lived in communes and “owned” nothing but all was shared to be used for the greater good. Was that “theft” to the person who contributed the most? Or did they receive other benefits in their life that would have never been possible to receive on their own?

    What would be your system to live in a civilized society?

    Reply
  6. Tori

    Would love to see the response on the fact that the tax credit is non-refundable. Doesn’t that blow most of your argument out of the water? To me, I see it as paying my taxes in a different way. I am taking care of a child as part of my debt to society (or the government)……

    Reply
    1. Ryan M

      Tori,

      The adoption tax credit is non-refundable for 2012. However it was made refundable in 2010 and 2011. Not sure where we are after the bill that passed two days ago but I can assure you it was refundable in those years. You are correct in saying that if it is non-refundable, then no big deal. But if it is refundable, like it was in 2010 and 2011 then that is where we have a problem. I’m not sure what the deal with the new bill is. But I know lots of families waiting to see if it will be refundable or non-refundable.

      Reply
      1. Tim

        Whether it’s refundable or not doesn’t matter much. Refundable would allow a family to collect the maximum credit in the year they actually incurred the expenses regardless of how much federal income tax they paid (which is clearly very helpful and why so many families are interested in having the credit formulated that way). But since most of these families are paying income tax over the years, they’re hardly getting some sort of “payday” through this credit, especially if you consider the challenges they endure and the tremendous service they are rendering to society through adoption.

        Those families will hopefully be able to claim the full non-refundable credit over time as you are allowed to keep claiming it over a few years until you hit the maximum or “time out” on the credit. And since you recognize those paid taxes as families’ personal property robbed of them by the state, they are simply reclaiming what is rightfully theirs in the first place from your view. Even if they were to take advantage of a refundable credit that exceeded their tax liability for that particular year, over the course of their taxpaying careers they will have likely been stripped of tens of thousands or hundreds of thousands of dollars of their own money. And so… in the great IRS balance sheet of life… they’re only reclaiming what is theirs whether they’ve paid it in already or soon will. It is probably a very rare instance where a family claim a credit for an amount exceeding what they pay in over time, given the fact that those not paying income tax are likely not in a financial position to adopt in the first place.

        I think that your post and some of the examples you’ve brought up have distracted from your over-arching point. I believe, if I understand you, that you take exception with redistribution of private wealth in the form of government aid, and probably feel this is the role of the church and the private citizens according to their conscience. If I’m reading you right, you feel there is a distinct difference between a government saying “we feel that Gov’t Aid Program X is a good idea” and saying “we feel the Aid Program is SUCH a good idea that we will take some of your wages to make you pay for it whether you like it or not.” Yours is an issue of the proper role of government, completely aside from whether or not a particular program they propose is “good.” Your question seems to be “is it right for government to be the one to handle this sort of thing in the first place?”

        And if this be the case, I can at least say I understand your point. For instance, I may feel that my kid would benefit from a spanking in an instance of disobedience at school, but I would not want his teacher or school administrator making that decision and handling it for me. Again, it’s an issue of roles, not whether the end action is “good” or not. Do I paint the picture?

        Reply
        1. Ryan M

          Tim,

          You are exactly correct. I was just using the issue of the previously refundable adoption credit (whether we agree or disagree about the importance of it being refundable v. non-refundable) as a springboard to make the point. I will be touching on the issue more in coming weeks, some civil disobedience issues as well hopefully. But you are right, it is an issue of proper roles and property rights.

          Reply

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