President Bush will propose that Americans be allowed to take tax deductions on more of their out-of pocket medical expenses, as part of an initiative the White House believes will rein in soaring health costs by shifting responsibility toward individuals, according to congressional and other sources familiar with the administration’s thinking.
The new tax breaks for personal health spending, to be included in the 2007 budget Bush will release in less than two weeks, are designed to help the uninsured and to allow people with insurance to write off a greater portion of the money they spend on co-payments, deductibles and care that is not covered. Under current tax rules, people can deduct medical expenses only if they exceed 7.5 percent of their adjusted gross income.
The president also plans to call for an expansion of health savings accounts, an idea long favored by conservatives and approved by Congress slightly more than two years ago, in which people who buy bare-bones insurance policies are allowed to put money into tax-free accounts for their medical expenses.
I am, most of the time, strongly in favor of tax cuts. I am also strongly in favor of health savings accounts. What I am not in favor of is solving our health care problems, which is an important political issue to a lot of Americans, with more social engineering through the tax code. I think this would only serve to make the already confusing maze of deductions, regulations, credits and refunds that is our tax system all the more complicted while actually doing very little to solve the original problem.
How much will tax breaks for medical expenses really help Americans when they still need to hire a lawyer/accountant to make sure their tax forms add up correctly?
I see this announcement as pure political laziness on the part of our President, and a clear indication that the tax reform promised to us by Republicans during their campaigns isn’t coming down the pipe any time soon. After all, if they there are plans to reform the tax code why would Bush still be trying to introduce new, complicated regulations to it?
You can read more from Rob Port at SayAnythingBlog.com