We have already discussed two modifications that are needed to address the tax treatment of health care costs:
1. Expand the Role of HSAs
2. End the Preferred Tax Treatment to Employer Sponsored Health Care Plans
We will now discuss two more:
1. Equal Tax Treatment for Individual Health Care Costs
2. Tax Credit for Assuming the Health Care Costs of Family Members
Equal Tax Treatment for Individual Health Care Costs
First, the government should treat all individual health care costs the same – health insurance premiums, co-op premiums, health share premiums, out-of-pocket expenses, etc. Presently, Americans can only deduct health care expenditures that are greater than 7.5% of their adjusted gross income. The average gross income in the US is around $55,000 (Footnote 1). That means the average American has to spend $4,125 before they can deduct any of it from their income taxes. How is that right? We allow every dollar for employer sponsored health care to be tax free but yet the uninsured cannot deduct their own out of pocket expenses if below this level.
There are Medical 529 Flexible Spending Accounts that allow for employees to pay for health care related expenditures with pre-tax dollars. However, these again are employer sponsored plans. The unemployed cannot take advantage of this tax treatment. It also further entrenches the employer as the provider of health care and not the market.
Tax Credit for Assuming the Health Care Costs of Family Members
Second, those who do pay for the medical expenditures of a family member can deduct these costs from their taxes as well. However, what is needed is not just a deduction, but a temporary tax credit to encourage families to take care of one other. This credit would be enacted at the same time Medicare & Medicaid levels are frozen and vouchers provided to those who would otherwise qualify for these programs. This credit is needed as an encouragement to help restore the family as the basic unit of society and can be of great aid as the government reduces its own involvement in the insurance business and manipulation of the private industry.
Taxes do change behavior and they create, alter or destroy markets. Justice in health care requires Justice in tax treatment.
These are two other examples of changes that seem very logical to make when trying to save Americans from the burden of health care costs. These are not complicated changes. They simplify the tax code, end government manipulation over health care, free up creative forces, lift burdens, and promote the family. They are simply the right way to go.
__________________________
Footnotes:
1. http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96981,00.html
1. Expand the Role of HSAs
2. End the Preferred Tax Treatment to Employer Sponsored Health Care Plans
We will now discuss two more:
1. Equal Tax Treatment for Individual Health Care Costs
2. Tax Credit for Assuming the Health Care Costs of Family Members
Equal Tax Treatment for Individual Health Care Costs
First, the government should treat all individual health care costs the same – health insurance premiums, co-op premiums, health share premiums, out-of-pocket expenses, etc. Presently, Americans can only deduct health care expenditures that are greater than 7.5% of their adjusted gross income. The average gross income in the US is around $55,000 (Footnote 1). That means the average American has to spend $4,125 before they can deduct any of it from their income taxes. How is that right? We allow every dollar for employer sponsored health care to be tax free but yet the uninsured cannot deduct their own out of pocket expenses if below this level.
There are Medical 529 Flexible Spending Accounts that allow for employees to pay for health care related expenditures with pre-tax dollars. However, these again are employer sponsored plans. The unemployed cannot take advantage of this tax treatment. It also further entrenches the employer as the provider of health care and not the market.
Tax Credit for Assuming the Health Care Costs of Family Members
Second, those who do pay for the medical expenditures of a family member can deduct these costs from their taxes as well. However, what is needed is not just a deduction, but a temporary tax credit to encourage families to take care of one other. This credit would be enacted at the same time Medicare & Medicaid levels are frozen and vouchers provided to those who would otherwise qualify for these programs. This credit is needed as an encouragement to help restore the family as the basic unit of society and can be of great aid as the government reduces its own involvement in the insurance business and manipulation of the private industry.
Taxes do change behavior and they create, alter or destroy markets. Justice in health care requires Justice in tax treatment.
These are two other examples of changes that seem very logical to make when trying to save Americans from the burden of health care costs. These are not complicated changes. They simplify the tax code, end government manipulation over health care, free up creative forces, lift burdens, and promote the family. They are simply the right way to go.
__________________________
Footnotes:
1. http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96981,00.html
0 comments: