When Our Taxes Subsidize Corruption

I have written about this before, as I see there is much wrong with the adoption tax credit. Even the New York Times gave me a space to say my piece when the tax credit was up for renewal, so I am happy to share the soapbox this morning with my friend Peter Dodds. Since Peter is an international adoptee, who better than to speak about this issue!

Sequestration will slash more than $1 trillion in government programs over the next 10 years with roughly $85 billion slated for 2013. Americans suffer as critical services like Meals on Wheels and Head Start are slashed. Despite these reductions, the lavish international adoption tax credit that provides a financial bonus to parents who adopt foreign children sails unscathed through the financial storm. Sequestration spotlights the need to end the tax credit for international adoption.

Adoption Tax Credit History:

In 1996, the Adoption Promotion and Stability Act was introduced in Congress to help families defray adoption costs and to promote the adoption of foster care children. This policy was aimed at serving America’s abandoned and abused children with the goal of placing them in permanent families via adoption.

But over the years the adoption tax credit has been side-tracked to promote international adoption. Four reasons to eliminate the policy of rewarding parents who adopt off-shore:

#1: Those adopting internationally make a choice

Overburdened American taxpayers should not be required to subsidize parents who make a choice to adopt outside the United States.

Unlike government programs designed to assist those who, through no fault of their own need assistance, this tax credit is a financial windfall for parents who chose to adopt from abroad. Rather than offering a hand-up to those in need, the tax credit for international adoption is an unnecessary government handout to those satiating their desire to parent. Taxpayers are left to pick up their tab.

#2: Taxpayers Foot the Bill for the Wealthy

Adopting foreign children is expensive. The U.S. Bureau of Consular Affairs reported that agencies charged prospective parents up to $64,357 for processing an international adoption in 2011. On the other hand, expenses for foster care adoptions are minimal or at no cost.

The international adoption industry recognized their prices were beyond the reach of most Americans. To stay in business the industry lobbied Congress on two fronts. First, by the year 2012, the maximum amount of the credit was increased to $12,650.

Second, the industry successfully lobbied Congress to expand the tax credit to include those with hefty incomes of up to $229,710. Nearly 90% of the adoption tax credit filers with incomes above $100,000 adopted internationally or privately.[i] They can deduct luxury expenses like reimbursement for airline tickets to foreign countries, as well as hotels and meals while in-country.

Hard earned public dollars are being spent on wealthy jet setters who fly around the world and pick-up kids to fulfill their parenting desires. The policy of reducing the tax obligation of the well-to-do who make an expensive choice to adopt internationally is paid for on the backs of hard working, lower and middle-income tax payers.

#3: The International Adoption Tax Credit Undermines the Foster Care System

“Saving children” is a rallying cry of international adoption advocates. But their slogan rings hollow because 100,000 abandoned and abused foster care children wait to be adopted. The original intent of the adoption tax credit was to promote the adoption of foster care children. Unfortunately, that goal has been lost as the vast majority of credit recipients are for international or private adoptions, not foster care adoptions. More than 82 percent of the total adoption tax credit goes to parents who adopt privately or from foreign countries.[ii]

Hundreds of thousands of abused and abandoned children in the United States languish in the foster care system. These children need permanent families but there’s little money to be made in foster care adoption. Thus, the agencies focus their efforts on the lucrative international market and charge up to $64,357 per child placed. In doing so, the international adoption industry turns its collective back on 100,000 American children in desperate need of permanent families.

The international adoption tax credit works against foster care children because it creates a financial incentive for Americans to adopt from foreign countries. A tax break that rewards prospective adopting parents to push aside foster care children is a really bad idea.

#4 International Adoption is Rife with Corruption

International adoption has a lengthy, on-going and documented pattern of adoption agency corruption, baby stealing, child trafficking, coercion of the biological parents and legal violations. The corruption and abuse are so widespread and pervasive that nearly half the 40 countries listed by the U.S. State Department as the top sources for international adoption from 1995-2008 temporarily halted adoptions or were prevented from sending children to the United States.[iii]

Every few weeks another scandal breaks illuminating the sleaze that is all part and parcel of this system. Since the fall of 2008, the Schuster Institute for Investigative Journalism has been releasing detailed reports on these problems that can be found at http:www.brandeis.edu/investigate/.

The tax credit for international adoption rewards a system unable to clean up its act. Hard earned tax payer money ends up subsidizing corrupt individuals and agencies that operate within the framework of a corrupt system.

In the midst of painful budget cuts, appropriating tax dollars to reward wealthy parents who choose to by-pass America’s foster care and adopt from abroad is an awful policy. Stop the tax credit for international adoption.

[i] Publication #2007-24 (Child Trends Research Brief, August 2007).

[ii] Ibid.

[iii] E.J.Graff, “The Lie We Love.” Foreign Policy, November 1, 2008.

About the Author:

Peter Dodds was adopted from a German orphanage by U.S. parents. His memoir Outer Search Inner Journey
is the first book written by a foreign born adoptee on the subject of international adoption. He’s a leader in the growing movement to reform international adoption and has delivered keynote addresses at conferences in New Zealand and Canada.