How parents of adopted children foiled a U.S. Republican tax proposal

[December 01, 2017]  By Katanga Johnson and Makini Brice

WASHINGTON (Reuters) - Charles "Chuck" Johnson is not the kind of foot soldier in the army of lobbyists that House of Representatives Speaker Paul Ryan warned would descend on Washington to fight the biggest overhaul of the tax code since the 1980s.

Johnson, 53, with a degree in social work and another from a theological seminary, heads the National Council for Adoption, a small organization in Alexandria, Virginia that represents adoption agencies and adoption lawyers. Despite a relative lack of clout, parents of adopted children and adoption advocates beat back against a minor change in the tax code that would have removed a tax credit to help cover the costs of adoption.

Politics in Washington favors the moneyed and the connected, especially Big Business and special interest groups rich enough to employ legions of lobbyists to advocate on their behalf.

But many of the taxpayers affected by President Donald Trump's tax overhaul have little or no influence on Congress, where Republicans are looking to end a host of tax credits and deductions for medical expenses, moving expenses and alimony in order to pay for their big tax cuts. The bill will cut corporate tax, provide a tax holiday for corporations' overseas profits and cut the tax rate for the wealthy.

"Everyone in corporate America had an army ready and in place to push for simplifying the tax code," said Michaela Sims Stewart, president of the lobbying firm Sims Strategies.

In contrast, parents of adopted children "naturally came together" to form a "small but mighty group," said Stewart.

Stewart also happens to be a spokeswoman for Adoption Tax Credit Working Group, which brought together a host of organizations, some with strong Republican and conservative ties, to pressure the House leadership to drop the change.

Part of the tax code since 1998, the adoption tax credit was used by nearly 74,000 people in 2014, according to the Internal Revenue Service.

The adoption advocates started a social media campaign on Facebook and Twitter to alert parents of the change. "We expected adoptive families to rally in support, but when groups like Focus on the Family, National Right to Life, U.S. Conference of Catholic Bishops, prominent clergy such as Russell Moore, and even the LGBT community joined, the media took an interest,” said Johnson, of the National Council for Adoption.

With the publicity, pro-family Republican politicians were suddenly in the position of having to explain the elimination of what the coalition had successfully cast as a pro-child policy.

The House proposal was dropped Nov. 2 and the Senate didn’t even bother to make it part of its version of the tax bill.

Graduate students rally against the proposed GOP tax reform bill at Union Square in the Manhattan borough of New York City, New York, U.S., November 29, 2017. REUTERS/Shannon Stapleton

STUDENTS PROTEST

While adoptive parents were ultimately successful in their fight, others have struggled to be heard.

Graduate students staged walkouts on dozens of campuses this week to protest one Republican proposal that would increase their tax burden. It would require graduate students to pay taxes on tuition payments that are waived by their university as if it were income. In other words, the students would be required to pay taxes on money they never had to begin with.

Few of the Republican proposals to end deductions or tax credits will yield a lot of money for a government that spends $4 trillion a year. Ending alimony deductions, a benefit in the tax code since 1954, might raise $8.3 billion over 10 years, according to an analysis by Congress's Joint Committee on Taxation.

No longer letting teachers write off $250 of what they shell out of their own pocket for classroom supplies might yield $2.1 billion over the same period, the committee says. The change affecting adoption might bring in less than $50 million over the next decade. The committee did not break out what ending medical deductions would yield.

Even though the stakes are high for them, advocates for people with disabilities and chronic diseases say they lagged in fighting cuts in medical expense deductibility, as well as other provisions that give a tax break to companies that make handicap-accessible structural changes and tax credits for business that people with disabilities. The tax breaks were not explicitly for people with disabilities, and the advocates had not expected they would be in Congress's crosshairs.

These less-than-powerful voices may yet be heard as the Senate prepares to vote on its bill this week. They may get another chance when the House and Senate compromise on a single piece of legislation to vote on and pass to Trump.

(Additional reporting by Susan Cornwell and Amanda Becker; Writing by Doina Chiacu; Editing by Damon Darlin and Ross Colvin)

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