The New Insulin Pump Tax and Health Insurance "Reforms"
Pardon the rant, but I am simply incredulous that the health insurance "reform" bill pushed by Obama and passed by the Democrats adds taxes for the sick, disabled, poor and middle class - and of course, diabetics on insulin pumps and using CGMS systems. Some of you Obama fans may reflexively disagree and I'm sure I'll hear no end of it here, but color me outraged.
Flexible Spending Accounts are often used by people who make middle class money, as long as they make enough to pay any taxes at all and have medical needs to pay for. Reducing the amount of FSAs to less than half of the current limit means that the sick and disabled who rely on them the most will end up paying more taxes! Even sick and disabled people and families making lower middle class incomes! And on top of that, they added a brand spanking new tax to medical devices, which will of course be passed right through to the consumers of those devices - diabetics and other people who are sick and disabled! Poor and middle class included! I use my FSA to help pay for pumping and CGMS supplies, and am well under the income levels Obama said he would not support new taxes on, and I am apoplectic that I have become the target to pay for their so called reform.
In spite of his oft repeated promise not to increase taxes on people making under $250k, Obama and the Democrats are trying to do just that in this bill, and in fact reaching MUCH, MUCH lower, right below the belt. In fact, they are taxing those members of the lower and middle class who are the sickest and/or disabled in order to pay for this huge new new bureaucracy. And the readers of this board are right on the front lines - this tax will directly affect many of you, as the costs of pumping and CGM use will no doubt rise in at least direct proportion to the new tax on these systems, if not substantially more.
I think I'm going to be sick right now.
Flexible Spending Accounts are often used by people who make middle class money, as long as they make enough to pay any taxes at all and have medical needs to pay for. Reducing the amount of FSAs to less than half of the current limit means that the sick and disabled who rely on them the most will end up paying more taxes! Even sick and disabled people and families making lower middle class incomes! And on top of that, they added a brand spanking new tax to medical devices, which will of course be passed right through to the consumers of those devices - diabetics and other people who are sick and disabled! Poor and middle class included! I use my FSA to help pay for pumping and CGMS supplies, and am well under the income levels Obama said he would not support new taxes on, and I am apoplectic that I have become the target to pay for their so called reform.
In spite of his oft repeated promise not to increase taxes on people making under $250k, Obama and the Democrats are trying to do just that in this bill, and in fact reaching MUCH, MUCH lower, right below the belt. In fact, they are taxing those members of the lower and middle class who are the sickest and/or disabled in order to pay for this huge new new bureaucracy. And the readers of this board are right on the front lines - this tax will directly affect many of you, as the costs of pumping and CGM use will no doubt rise in at least direct proportion to the new tax on these systems, if not substantially more.
I think I'm going to be sick right now.
Replies to This Discussion
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Permalink Reply by Anna Kiff (FatCatAnna) on -
Dave - be glad you don't live in the socialist country of Canada - if you are thinking Obama is bad - imagine if you were like us here in Canada. If your salary is under $20K CDN - you pay less taxes - above - well - you know who gets hit . We polite Canadian middle income earners just plod away, and pay our taxes.
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Permalink Reply by Terrie8 on -
Geez Anna. We Thank God we live with our health system. If our Family had to pay for every test, Drs. appointment, treatment and surgeries, we would have all been living in the street and most likely kaput many years ago.
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Permalink Reply by Terry Keelan on -
We are lost again in the semantics of taxation. How does reducing a tax break become a tax increase? You might as well say that when a store coupon expires on butter that the store has raised the price of butter.
Granted, this cap sucks for me for you and for others that use or could use more than $2,500 in their FSA. (Which, by the way is not less the half the current limit. There IS no current limit. However, in practice few employers offer an FSA greater than $5,000. Most employers DON'T offer one at all. Mine does. Poor people don't have FSAs. Since I don't complain that it's unfair that I get a tax break that other people don't, I don't get apoplectic that my special tax break is reduced. It sucks but it's not a deal breaker and it's not a broken promise, since it's not a tax increase.
The medical device tax, on the other hand, is a deal breaker. Stupid, short-sighted and politically expedient. I'm writing to my senator now.
Terry
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Permalink Reply by Scott on -
Terry,
Reducing a tax break is a tax increase. For arguments sake, let's say it gets capped at $2500 and I need $3500. I now pay taxes on $1000 that I did not pay before. The tax increase is me paying a tax that I didn't pay before.
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Permalink Reply by Jim Wright on -
Ah. I had an FSA at $7,000 for a while and thought that was the limit. (Was there one previously and it went away? I've never heard of anyone having a higher one, and I recall it being $5,000 at one point and then it getting raised. My current limit is $5,000 and I spend every dime, every year.)
And I agree with Scott, saying that reducing a tax "break" is not a tax "increase" is nonsense. The government is taking more of your money, that is a tax increase, period, and saying they could have been taking more before so it's not really an increase assumes the money was theirs before and not yours, as if the money you earned were really a gift from them - they are taking more from people, this is a tax increase notwithstanding any semantic BS.
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Permalink Reply by Terry Keelan on
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What about this example:
I made $50,000 last year. I made $60,000 this year, but stayed in the same tax bracket. Nonetheless, I paid more taxes. My taxes went up but was I subjected to a tax increase? No.
Or this - last year I paid $20,000 in deductible interest on my home mortgage. This year I paid $15,000 in deductible interest. My other deductions remained the same. Having less deductions I paid more taxes. Was I subjected to a tax increase? No.
Or this. Last year my neighbor qualifired for a tax break that I didn't. This year he didn't qualify and therefore paid more taxes even though his income and other deductions were the same. He paid more taxes but was he subject to a tax increase? No.
It's easy to say that because you pay more taxes the next year you have been subjected to a 'tax increase' but it's just not the same. If you're baseline tax liability has not gone up, you are not subject to a 'tax increase.' Getting reduction in your taxes for the FSA does not reduce baseline tax liability, it applies only to the taxpayers fortunate enough to have the plan available to them. Their baseline tax bracket hasn't changed. The scope of their eligibility has changed.
The attitude that taking away a benefit that others don't get somehow amounts to a punishment or deficit is beyond me.
Terry
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Permalink Reply by Scott on
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Terry, the difference between your examples and the FSA cap example is that the tax rules didn't change in those examples. Every case you described is not a tax increase, but they are not analogous to the FSA cap example, either
Let's say that the tax rules changed so that home mortgage interest is no longer tax deductible, causing you to pay more. That is an example analogous to the FSA cap example. Now the tax rules have changed, causing you to pay more in taxes. That would be a tax increase, wouldn't it?
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Permalink Reply by Terry Keelan on
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I see what you're saying, Scott, but I'm not on the same page. Simply changing the rules does not make a tax increase in my estimation unless it raises my baseline tax liability. Are we talking semantics or math? I'm not sure.
Take two people with the same income and deductions and therefore the same baseline tax liability. Taxpayer A works for a company that provides and FSA and taxpayer B doesn't.
A has been given a special opportunity to reduce his taxes that is not available to B, who is otherwise in exactly the same boat. So A has dropped 'below' the baseline tax liability that they both once shared.
If changes in the tax rules either bring A back up closer to the baseline or even TO the baseline, of course he is paying more taxes than he did before, but it's not a tax increase.except on an individual scale.
In my view, a tax increase is a broader concept that affects an entire class of taxpayers based on their income alone.
So, maybe it is semantics. In any case, I don't view this change in the law as offensive to me or a violation of any pledge not to raise taxes.
But that's just me.
Terry
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Permalink Reply by Scott on
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My only comment would be that an entire class of taxpayers would be affected, everyone who has an FSA falls under that umbrella. It does effect my taxable income because any amount over the cap is now taxable, whereas before it wasn't.
I guess we'll just have to agree to disagree.
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Permalink Reply by Terry Keelan on
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But the change isn't based on income alone. It's based on circumstances over which most employees have little control. Either an employer offers it or it doesn't.
So, let's disagree. I think this health care reform stinks anyway. I used to think that 'any reform' was better than nothing, but now I'm not so sure.
All we can do is get active and raise our voices.
Terry
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Permalink Reply by Jim Wright on
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That's because your loyalty to your chosen party has apparently caused you to reach for any justification, no matter how strained, to rationalize what they are doing as ok. Your "baseline tax liability" ruse is an illogical distraction - your tax liability is determined by a complex set of rules, the "baseline" is not justifiably distinguished from any of the other rules of the system, it's just a number in the calculation like any other. But since that number is not changing, you've decided that this one is special and different and it's only an increase if they change that one. I'll say it again - wow.
And to suggest that if they only raise taxes for some of the chosen group it doesn't violate a pledge not to increase taxes on anyone in that group once again strains credulity. Obama said "I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes." No family making less than $250,000 a year. My family makes vastly less than that. My taxes will increase. The pledge is clearly violated.
But it would seem that if the Democrats are behind it, you're ok with collecting extra taxes from the poor and disabled, and you couldn't care less if they break their pledge. The least you could do is admit it rather than trying to mischaracterize it.
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Permalink Reply by Terry Keelan on
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You don't know what party I support. (Hint: It's not the Democratic party.) You don't even know my opinion on the bill just passed by the House even though I just told you what is was. I just wrote that it stinks but don't let that get in the way of an opportunity to start another rant and ascribe to people beliefs and sentiments they havent' expressed.
I don't view it as a tax increase and I therefore don't view it as breaking a pledge. It's as simple as that. It's not a characterization or justification of anyone else's position, statement or policy, it's my view the proper definition of a 'tax increase.' Period. I never believed taxes would not go up, I never based my vote or support on any such a pledge, which I never believed in the first place and No, I don't care if he breaks it or not. I don't believe he has and if he does, I don't won't feel betrayed because I didn't buy it to begin with. George Bush the First taught me that lesson.
As for collecting extra taxes on the poor or disabled, the poor don't have FSA's and not everyone with an FSA is disabled. I previously objected to the medical device tax.
If every comment, even on the definition of terms, is going to become an excuse for partisan ranting, I'm out of this thread.
Terry
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