The Truth About the Adoption Tax Credit Hype

The Truth About the Adoption Tax Credit Hype
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When the GOP proposed a bill eliminating the Adoption Tax Credit in early November, conservatives were the first to go on the attack.

That was immediately followed by outrage to “save the adoption tax credit” that united both sides of the aisle, with headlines screaming: “Eliminating the adoption tax credit would harm Americans, financially and socially” and “Care About Kids? You Should Want to Save This Tax Credit.” The uproar was swift and loud and created a coalition of the strangest bedfellows including gay rights activists and pro-lifers. There was so much weeping and wailing to save it, it was reversed quicker than Louis CK lost endorsements. After all, for legislators, keeping - and every year increasing - the adoption tax credit which is touted to help people who could not otherwise afford adoption is akin to supporting apple pie. The backlash was so powerful the House and Senate reversed plans to eliminate it by Nov 9 – just days after it was reported to be scrapped!

My guess is that Arthur C. Brooks, president of the conservative think tank, American Enterprise Institute (AEI) began writing his New York Times op-ed, “Let’s Restart the Adoption Movement,” to add his voice to the prodigious battle cries that were so overwhelming they beat him to the punch and it was already reversed by the time his adoption praise piece hit the press.

In it, Brooks links to one of my articles, referring to me as part of the political “fringe” because I am proud to be among activists, authors, journalists, and whistle-blowers exposing the exploitation, corruption, human trafficking, and institutional as well as individual abuses in adoption, some of which Brooks acknowledges, but dismisses as “bureaucratic screw-tightening.”

Contrary to Brooks’ analysis, adoption does not need “restarting.” What it desperately needs is reform and regulation. Brooks laments the decrease in foreign adoptions “both for nationalistic reasons and because of worries about corruption and human trafficking” but doesn’t seem to grasp that corruption and human trafficking for adoption are very real and warrant far more than “worry.”

Brooks, and others like him who favor maintaining the mega-billion-dollar adoption industrial complex buffered by American tax dollars, are quick to dismiss the 20 suspicious deaths and more than a dozen American adoptive parents convicted in the deaths of their Russian-born children. They ignore the whole embarrassing crises of American adopters rehoming adopted children, mostly those adopted from overseas. They turn a blind eye to the widespread kidnapping and trafficking of children in Guatemala, scandals in Ethiopia and other nations forcing them to shut down the mass looting of their youngest. Other countries who have ceased to allow the wholesale theft of their children for profit and to fill a demand include: Bhutan, Kazakhstan, Kyrgyzstan, and Rwanda. And CNN reports that South Korea plans to phase out international adoption (IA), and adoptions to the United States from Nepal have effectively stopped.

The term “bureaucratic screw-tightening” to describe efforts to halt such abuses is the new spin of those opposed to anything that reduces the steady flow of children as products mined to meet a demand, just as many American businesses oppose environmental regulation, caring less about safety than their bottom line. In the case of child adoption, the “screw tightening” phrase illustrates the distorted mind-set that puts the desires of adults seeking children above the rights of families torn apart and their children being exported and shipped off away from their culture and heritage.

Rather than screw-tightening, it is a matter of nation after nation putting their foot down against the corruption created by the high demand and increasing price tags being paid for children. This is country after country seeing what is happening and responding appropriately with a renewed desire to do better for their own families and children in need. The decline in the mass commodification and export of children is to be applauded and supported, not bemoaned with disdain.

Would attempts to stop human trafficking for sex slavery be belittled as “bureaucratic screw-tightening”? Why is protecting families from the kidnapping of their children to be sold to foreign nations not deserving equal respect? Why wouldn’t everyone support even tighter “screws” to protect the world’s children? Or are the rights of helpless babies less important than keeping the supply train rolling to meet the overwhelming demand?

Back to the adoption tax credit . . .

Brooks is quite correct that those seeking to adopt today are concerned about time and finances. This is nothing new. Adoption is sadly far less about finding homes for children in need than it is a business transaction filling a demand. Adopters want to accomplish it as quickly and reasonably priced as possible. They do their comparison shopping, discovering that costs are directly linked to age, health, race and ethnicity of the child they are willing to accept, making the reality of adoption a bit less romantic and altruistic and more synonymous with choosing a used car versus new, import versus American-made, and how many luxury features you want included.

Adoption today is ironically, about adopters trying to avoid “damaged” special needs children without recognizing that children adopted from overseas are likewise damaged by Fetal Alcohol Syndrome Disease, their stay in an orphanage, culture shock (including food and language), and the time in foster care waiting for red tape to process their adoptions. But it does succeed in putting enough distance between adoptive and original family as to ensure no “interference” – a big advantage reported by those who chose intercountry adoption, especially now when many US mothers who place children are requesting open adoptions.

Even a cursory look at the history of the adoption tax credit, however, makes it clear that congress enacted the federal credit in 1996 as a provision to the Small Business Job Protection Act to defray costs of adoption in order to “encourage the adoption of special needs children.”

The adoption tax credit was first passed in 1996 and made permanent in 2013 through the American Taxpayer Relief Act yet far more of our tax dollars have been supporting international (IA) and infant adoption, not foster adoption.

Year after year more and more of our tax dollars are going to support more expensive international and infant adoptions, leaving behind 100,000 children in high-risk foster care supported by taxpayers. According to the Congressional Coalition on Adoption Institute (CCAI) data has shown that “significantly fewer families adopting out of foster care utilized the adoption tax credit as opposed to higher numbers of families in private domestic or intercountry adoption.”

Typically, to qualify for a credit, taxpayers have to make enough for it to count against what they owe in taxes, helping the wealthier more than those in need. In 2004, for instance, less than one-quarter of taxpayers claiming the tax credit adopted from U.S. foster care according to “The Adoption Tax Credit: An Ethical Dilemma” by Joe Kroll, Executive Director of North American Council on Adoptable Children (NCAC).

Tax credits reduce federal income tax on a dollar-for-dollar basis, making them more valuable than tax deductions, which simply reduce your taxable income.

Additionally, the adoption tax credit helps the highest earners the most. The renowned Evan B. Donaldson Adoption Institute (DAI), a major proponent of the tax credit, asks: “Is it ethical that intermediaries and those least in need benefit the most from these tax credits?" ( Evan B. Donaldson Adoption Institute. 1999. Money, Power and Accountability: The “Business” of Adoption. Evan B. Donaldson Adoption Institute Conference Summary. Anaheim, November 1999.)

Further, many who adopt today are funraising to do so either with yard sales or online. Are the thousands of dollars some recive via donations to help with adoption costs claimed and deducted from their claimed adoption expenses?

Politicians from both parties promote the adoption tax credit to appear that they are supporting alternatives to abortion despite the fact that adoption has no effect whatsoever on the abortion rate as reported by Cory L. Richards Guttmacher Institute.

Finally, qualified expenses for intercountry adoptions cannot be claimed unless such adoption becomes final. However, for families whose domestic adoptions never reach finalization and fail for some reason, families may still claim the credit. Thus, the federal tax break for people who adopt helps up to 50% of those who try to adopt and fail to. Even if a domestic adoption falls through, you can claim a tax credit according to Don Roberts, an IRS spokesman in Washington. “Even if an adoption never becomes final, but you spent money in the attempt, you can claim the expenses in the year after they are incurred," Roberts said.

Molly Rampe Thomas, founder of the adoption agency, Choice Network, writes:

“...while the credit does help those families who pursue adoption out of the foster system, it’s not doing nearly enough, and the resources supporting families adopting outside the traditional closed-adoption-of-an-infant world are insufficient. There are intense social and emotional supports needed to help families who adopt from foster care succeed, and the resources are virtually nonexistent.”

Why are we supporting adoptions (and failed attempts to adopt) that ignore the hundred thousand children in state care the tax benefit was intended for?

The answer is that adoption is big business with powerful lobbyists to support the multitude of merchants, attorneys and unlicensed practitioners who earn their livelihood on the redistribution of children. NCAC and Donaldson have joined the throngs of tax credit supporters and ensured that articles about the tax credit not going where it was intended, as well as data on the credited dollars going far more to international and infant adoptions than foster adoptions, has all been scrubbed from the Internet leaving only the overwhelmingly positive spin on the adoption tax credit.

Pro-adoptionists hide the truth because as the tax credits increase each year, adoption practitioners raise their fees while assuring clients that they can recoup the higher fees via the federal reimbursement. So, in effect, it can be argued that the tax breaks are really supporting private for-profit and not-for-profit adoption agency businesses, which exist to meet a demand for children other than those in foster care.

Let us not forget that adoption should not be about meeting the needs of the 150 individuals and couples competing for every baby available.

The current adoption tax credit is $13,570. Your tax dollars – to the tune of $300 million in 2015 - are supporting those in the business of facilitating adoptions and those choosing babies from popular foreign lands and highly sought-after newborns far more than helping the children caught in the rotting foster care system - paid for by your tax dollars - only to “age out” with nothing. One can only imagine the number of mothers and families for whom $13k would see them through a temporary crisis that instead causes them to lose permanent custody, sending yet another child into the foster care abyss.

Our moral and financial obligation is not to foreign-born children – many of whom are taken by lies and deceit - when there are 100,000 of our own American-born children in state care paid for by hard-working taxpayers. Adopters often ask why it is their obligation to adopt from foster care. The answer is it is not. But it is also not the obligation of rest of us to help support their preferences any more than it would be to support surrogacy as a choice of family building with tax dollars, or will that be next?

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