Your Health, Dogs & Tax Deductibility
By Jim Schwartz, NAPP Founder (*)
Freud’s advice is good for mice
· AIG study found that those with a dog live on average 7 years longer
· Studies by Dr. Karen Allen & others show having a companion animals::
1. lower blood pressure,
2. lower cholesterol levels,
3. improve cardiovascular health,
4. relieve the depression associated with serious illnesses like AIDS improving survival rates
5. human dog intereactions (i.e. gazing) elicit the same time of oxytocin (hormone) positive as seen between mothers and their infants. And that, in turn, may explain why we feel so close to our dogs, and vice versa. Science Mag April 2015
Of course, the aforementioned doesn’t include the health benefits bestowed by dogs, particular, in the roles of
1. therapy dogs
2. assistance dogs
3. hearing dogs
4. epileptic alert dogs
5. cancer detection
As many a police officer (and begrudgingly home security specialist) will admit, probably the best deterrent to an intruder (which could conceivably impact one’s physical and mental well being if in a confrontation) is the deterrent of having a dog (thus saving in homeowner insurance premiums – a fact the insurers ignored in their calculations (1) even though dogs are a deterrent to claims.
While overall American birth replacement rates (except a bump in 2013) have declined. Data from the National Center for Health Statistics show that the TFR (total fertility rate dropped to 1.9 in 2010—well below the replacement level of 2.1. However, according to Mark Penn in Microtrends, companion animals are growing at the 200% the rate of kids in U.S. households now per recent estimates totaling over 200 million in 100 million US households. And an interesting side note, the fastest growth rate of companion animal guardianship is 3 or more by the age demographic age 50+. Given estimates that 19% of the senior population is classified as ‘orphan seniors’ (no family) the companion animal(s) take on greater significance in the continued health and well being of those 50+ .
Now companion animals are not without significant costs – be it initial cost & damage, veterinary bills, grooming, feeding etc. And yes, there is sometimes the bark, poop and pee (especially when younger). So let’s say, at the very very high end with pet health insurance as well on average Simcha and Goodie (each run on average $6,000 a year.)
Now let’s contrast this with having a child born in 2013 to the age of 18 will cost a middle income couple just over $245,000. In its most recent survey of college pricing, the College Board reports that a "moderate" college budget for an in-state public college for the 2014–2015 academic year averaged $23,410. A moderate budget at a private college averaged $46,272. So 4 years of room board tuition and books (remembering less than 50% finish college now in 4 years) that’s $92,000. But there is another cost not factored in (the difference between college education cost inflation ((which has run between 300% to 400% of the cost of living index – say 9% vs 3% or a 6% differential)) been invested in one’s retirement plans let say at for 18 year at 8% - that is an opportunity cost of for arguments sake at a $5500 differential (2) as much as $80,000 diverted from your work free retirement per child and or having to be a greeter at Wal Mart. So conceivably we are looking $400,000 to $500,000 per child.
Now, lets say the average dog lives even 15 years @$6000 per year thus costing $90,000. That alone is a cost benefit favorable differential of 444% to 555% in favor the dogs which doesn’t even factor in the child coming home having graduated from college without a job resenting you, living with you, and still thinking you are stupid. How does one calculate the relative psychic income deficit increasing the 4.4 or 5.5 :1 benefit of a dog let alone the psychosomatic impact (increasing your medicare part D prescription premiums to you and the country) for Xanax™? Lastly, if you send your child back from graduating college to his or her room (though without paying rent) for an hour turning of the WiFi while putting your dog in another room for the same amount of time – who is gonna come out wagging their tail inducing oxytocin and who will be wagging their finger at you metaphorically depleting oxytocin?
Therefore, unless we get a flat, flatter, or consumption tax to replace the existing income tax system, doesn’t it make sense for the costs of our companion animals be included in calculating our medical deduction – or an exemption for taxes purposes to encourage a healthier and happier America?
In God & Dog I Trust, All Others Pay Cash
(*Schwartz is a recovering fee only personal financial life planner, author of two editions of ENOUGH, co founder of NAPFA, 1985 Personal Financial Planner of the Year. Having repented, he is now just A Man of Dog, founder & confounder of NAPP. Schwartz occasionally writes – due to regression to mean - on personal financial life planning matter at healingfinancialanxiety.