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GOP Tax Plan: Eliminated Medical Expense Deductions; Then The Resistance Spoke Up
The multiple Republican tax plans are difficult to keep up with as they move towards a combined House and Senate bill that both aim to vote on before Christmas. The Democrats will have no say in the matter. The underlying theme is to cut taxes as much as possible for the wealthiest.
Today, Smart Dissent describes a disgusting, hidden part of the original GOP Tax Scam. The Resistance spoke up about this and as of now, the proposed final bill between the House and Senate has reversed course and kept the medical expense deductions in place.
The House Republican tax bill would eliminate the ability for individuals to deduct qualified medical expenses, a provision that could have major implications for households with extremely high health-care costs.... current law.... allows individuals to deduct qualified medical expenses that exceed 10 percent of a person’s adjusted gross income for the year. The bill would repeal that itemized deduction
What does that mean exactly and why is it disgusting and cruel? Let's say your family makes $50,000 in a given year. 10% of that income is $5,000, an enormous expense for medical costs at that income level. Any amounts spent above that $5,000 can be used to reduce tax liability, saving those families real dollars they need to provide medical coverage and survive in our society. Not to mention that elderly use more than half of these deductions.
....eliminating the medical-expense deduction would hit the middle class squarely, eliminating a source of relief that has helped millions of people cope with steep medical costs in a country without comprehensive, universal health coverage.
According to an analysis in January from the Joint Committee on Taxation, most taxpayers who claim the deduction have incomes below $100,000, with about 40 percent below $75,000. More than half of those who claim it are older than 65, according to AARP, the lobby for older Americans. They often face staggering medical and long-term care costs.
You don't have to be ill to have high medical costs. Pricey premiums for long-term-care insurance, currently deductible, no longer will be under the new tax proposal. And if you have a steep health insurance deductible, you'd no longer have the benefit of writing off that substantial cost, either.
SHAME ON YOU REPUBLICANS. So the estate tax would be eliminated, saving only the absolute wealthiest Americans. Corporate taxes slashed further benefiting the wealthy. However, families with extraordinary medical expenses -- tax them more!
The Joint Committee estimated that the deduction for medical expenses would cost the federal government $10 billion next year, if it were not eliminated. That is far less than the two big deductions the Republican bill would preserve: one for interest paid on home mortgages is expected to cost $63.6 billion, and one for charitable donations, $47.8 billion. Most taxpayers claiming those deductions have incomes above $100,000.
“I understand that in order to get tax reform through there need to be some ‘pay fors,’ but getting those revenues from families who have been hardest hit by high cost medical conditions like autism or cancer.....” said John Rodakis who.... runs a nonprofit foundation devoted to autism research.
The list of those most impacted:
• The disabled and their families. Under the current law, a household with a disabled family member can deduct numerous expenses not covered by insurance, including therapies of various kinds, prosthetics, high-cost drugs, and even home improvements that make the residence more accessible. Blind and deaf people can deduct the cost of maintaining a service animal. That would go away under the new law.
• Households facing a catastrophic illness. The unreimbursed expenses for very costly diseases, including experimental drug therapies, could not be deducted under the proposal.
• Those with high medical insurance deductibles. According to the Centers for Disease Control, nearly 40 percent of individuals have high-deductible health plans, which can cost a family as much as $13,000 in the event of a major illness. Writing off the cost of those deductibles would no longer be an option.
• Older people. Fifty-five percent of those taking the medical deduction are 65 and older, says AARP. If those 50 and older are included, the figure rises to 74 percent. Unreimbursed home care costs, assisted living expenses, and long-term care policy premiums would no longer be deductible.
The shame was felt because The Resistance spoke up. The current "final" bill was changed at the last minute to maintain the medical deductions.
After a loud political backlash to the House plan, the deduction will kick in for expenses totaling 7.5 percent of income instead of 10 percent. This provision is aimed at people who have unusually large medical bills, and Senator Susan Collins of Maine in particular fought to expand rather than eliminate it. She has said that 8.8 million Americans use it, half with annual incomes under $50,000.
Sources:
https://www.nytimes.com/2017/11/08/health/medical-deduction-tax-bill.html
https://www.consumerreports.org/taxes/how-ending-medical-tax-deduction-could-affect-you/
http://thehill.com/policy/finance/358437-gop-tax-bill-would-eliminate-medical-expense-deductions