Social conservatives have urged House Republicans to retain a tax credit for families who adopt children in their tax overhaul bill, arguing the party shouldn't gin up revenue at the expense of vulnerable children and the taxpayers who would give them homes.
The adoption tax credit is on the chopping block in the bill being debated this week in the House Ways and Means Committee. The bill's drafters aim to significantly cut corporate taxes, compress individual income-tax brackets and eventually repeal the state tax, requiring them to offset those revenue losses by curtailing other tax breaks. The Joint Committee on Taxation estimates repealing the adoption credit would raise $3.8 billion over a decade.
But adoption advocates argue the high initial costs of adopting a child, including legal fees and medical expenses, justify a special credit. The adoption credit -- a one-time credit of up to $13,570 per child -- is only available to those with incomes lower than $243,540. In 2015, 63,950 families used the credit, for an average refund of $3,925, according to Internal Revenue Service data. The total cost of the credit is $251 million.
"We certainly don't want to do this on the backs of orphans," said Jim Daly, president of Focus on the Family, an evangelical conservative group, about the tax bill.
The bill will raise the child tax credit to $1,600 per child from $500, a measure the bill's authors say will aid all families, and provide other broad tax benefits.
"Do we want to stick with the old credit, which leaves fewer and fewer people behind, and helps one time in your life?" Ways and Means Committee Chairman Kevin Brady (R., Texas), who adopted two of his children, said on a radio broadcast Tuesday. "Or do we go with the tax cuts that provide about $2,000 a year, and the new family credit that helps you with your child every year of their life?"
The adoption tax credit gives "breathing room" to middle-class families who adopt, said Mary Hansen, a professor of economics at American University. It is a nonrefundable credit that offsets federal income tax liability.
More than 60,000 children are adopted from foster care each year in the U.S., and about 18,000 infants are adopted privately, according to Ms. Hansen's data.
In foster care adoptions, the state pays for many of the legal fees, but parents of children with special needs are eligible for the tax credit. Private adoptions, in which a family may pay a service or agency to find a child, may cost up to $40,000 for legal fees, and medical and travel expenses, according to Adopt U.S. Kids, a project of the U.S. Children's Bureau.
Some Republicans say that the party that opposes abortion rights should support the adoption tax credit because it advances the strong Christian social conservative agenda.
"If you want to talk about being pro-life or literally protect those people in the middle and lower income ranges, to me this is something that needs to be put back in," said Rep. Mark Walker (R., N.C.), a former pastor.
Rep. David Schweikert (R., Ariz.), who has an adopted daughter and who himself was adopted, said he was balancing a desire to restore the credit with the need to find enough revenue for the tax bill.
"I have things I personally want to do but I also want to get the math right," Mr. Schweikert said.
--Kristina Peterson and Richard Rubin contributed to this article.
Write to Natalie Andrews at Natalie.Andrews@wsj.com
(END) Dow Jones Newswires
November 07, 2017 15:08 ET (20:08 GMT)