B’nai B’rith International is concerned that the new tax plan offered by the House of Representatives could have a devastating impact on older and other vulnerable Americans.
As currently written, the Republican plan would not allow Americans to deduct medical expenses from their taxes. This could cause those with high medical bills to pay more in taxes. Additionally, tax reform potentially paves the way for deeply troubling potential cuts to programs that seniors rely on for their day-to-days needs, such as Medicare, Medicaid and the Supplemental Nutrition Assistance Program (SNAP).
Currently, the medical expenses deduction enables people to lower their tax bill by allowing them to deduct medical and dental expenses if their medical bills go over about 10 percent of their income. Medical expenses that can be deducted from federal taxes include prescription drugs, insulin, glasses, hearings aids, payments to doctors, dentists and surgeons, nursing home fees and some long term care insurance premiums.
Internal Revenue Service (IRS) data from 2013 show that 56 percent of taxpayers who took the deduction were over 65. Additionally, 51 percent of individuals over 65 who took the deduction had an annual income under $50,000. Furthermore, according to the IRS in 2015 more than 9 million Americans deducted $87 billion for medical expenses on their tax returns. We are very concerned about the impact eliminating this deduction could have on seniors, particularly low-income older Americans who have used this tax savings to save money on their vital medical needs.
It is expected that this tax reform plan could add an additional $1.5 trillion to the deficit of the federal government over the next decade. This could seriously harm our more vulnerable populations as increasing the deficit would provide cover for lawmakers to argue for cuts to important federal programs such as Medicare and Medicaid to make-up for the shortfall.
Programs like Medicare and Medicaid need to be fully funded, and cutting off potential revenue for such vital resources is not a path Congress should consider.