House Republicans Target Medical Expense Deductions

By Daily Editorials

November 23, 2017 3 min read

Is it right that people in nursing homes and families with disabled children should pay more taxes so corporations and wealthy Americans can pay less?

That could be the worst part of the tax cut bill passed in the U.S. House last week. Republicans, including all six from Missouri and John Shimkus and Mike Bost from the Metro East, voted for the $1.5 trillion bill on the dubious pretext that it will spark economic growth that magically will trickle down to everyone's benefit. In the meantime, corporate shareholders and wealthy taxpayers would enjoy the vast majority of the bill's benefits.

To pay for it, the GOP eliminated a whole slew of deductions, keeping only those for mortgages, employer-paid medical insurance and charitable donations. In 2018, the deduction for extraordinary medical expenses would go away.

The deduction allows taxpayers to write off medical expenses that exceed 10 percent of their taxable income. Most families don't have anything near that level of medical expenses, so they take the standard deduction, which the House bill would nearly double.

But for millions of families, even doubling the standard deduction won't offset the extraordinary cost of paying for long-term nursing care for loved ones, cancer treatment not covered by insurance, or caring for loved ones with Alzheimer's disease, autism or profound disabilities. For them, the medical expense tax deduction is the difference between bankruptcy and scraping by.

The American Association of Retired Persons' Public Policy Institute reports that in 2015, about 8.8 million Americans used the deduction. Nearly 7 in 10 had annual incomes below $75,000; more than half had a family member over 65 years old.

"For people who are receiving long-term care and are paying for it themselves, this is going to be a huge deal," Richard Kaplan of the University of Illinois Law School told CNBC.

Relative to the $225 billion cost of the medical insurance deduction, the medical expense deduction is not a huge deal - about $10 billion in 2018.

Fortunately, eliminating it is not in the Senate tax bill slated for a vote next week. But the Senate version proposes to eliminate the Affordable Care Act's individual mandate. Such a move could sink Obamacare altogether, causing considerable pain for 13 million Americans who would lose health insurance and higher premiums for everyone else. Either bill could trigger $25 billion a year in cuts to Medicare.

There is a lot to hate in both bills, and Americans know it. A Quinnipiac poll last week found that only 25 percent of voters approve of the GOP tax-cut effort while 52 percent disapprove. Just 24 percent view it as good for the middle class.

Congressional Republicans have veered onto a track leading to a cliff. The sooner they realize it, the better off they and the country will be.

REPRINTED FROM THE ST LOUIS POST DISPATCH

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