2017: Fitzpatrick Voted For The House GOP's 2017 Tax Reform Plan Which
Significantly Cut Taxes For The Rich And Corporations And Repealed The
Medical Expense Tax Deduction. In November 2017, Fitzpatrick voted for
reconciliation legislation which significantly altered the federal tax
code. According to Congressional Quarterly, "The bill substantially
restructures the U.S. tax code to simplify the code and reduce taxes on
individuals, corporations and small businesses. For individuals, it
consolidates the current seven tax brackets down to four and eliminates
or restricts many tax credits and deductions, including by eliminating
the deduction for state and local income taxes and limiting the
deduction for property taxes to $10,000 and the interest deduction for
a home mortgage to the first $500,000 worth of a loan. [...] On the
business side, it reduces the corporate tax from 35% to 20% and
establishes a 'territorial' tax system that would exempt most income
derived overseas from U.S. corporate taxation. It allows businesses to
immediately expense 100% of the cost of assets acquired and placed into
service, and for small businesses it raises the Section 179 expensing
limit to $5 million for five years. It also establishes a 25% rate for
a portion of pass-through business income that would otherwise have to
be paid at the ordinary individual tax level, and for small businesses
where an individual would receive less than $150,000 in pass-through
income it taxes the first $75,000 of that income at a 9% rate." The
vote was on passage. The House passed the bill by a vote of 227 to 205.
President Trump later signed an amended version of the bill into law.
[House Vote 637,
11/16/17; Congressional
Quarterly, 11/15/17;
Congressional Actions, H.R.
1]
Legislation Repeals The Medical Expenses Deduction. According to
Vox, "A variety of other, much smaller deductions, like the medical
expense deduction and the property casualty loss deductions, are
repealed." [Vox,
11/16/17]
To Be Eligible For The Deduction, A Taxpayer Has To Spend At Least
10 Percent Of Income On Medical Expenses. According to Vox, "The
medical expenses deduction allows people with especially high health
care costs to deduct that spending on their tax reform. To qualify,
you must spend at least 10 percent of your income on medical
expenses. The IRS maintains a lengthy list of what counts as medical
spending that includes some things you might expect, like fees paid
to doctors or spending on prescription drugs. And there are some
things you might not expect. Turns out, one can deduct the price of
joining a weight loss club or attending a conference related to
one's own health conditions. Self-employed individuals are
typically able to deduct their insurance premiums, too." [Vox,
11/3/17]
Unlike Other Deductions, The Medical Expense Is Used More By
Poorer Americans. According to Vox, "An estimated 8.8 million
Americans use the deduction for medical expenses. This makes it one
of the smaller deductions --- it's nowhere near the size of the
mortgage deduction, for example. Most deductions benefit wealthier
Americans, who are more likely to itemize their deductions in the
first place. But the medical deduction is actually a bit different:
It is used more by poorer tax filers than those who are especially
rich. The Congressional Research Service estimates that 3 percent of
tax filers who earn less than $20,000 use the medical expenses
deduction, compared to less than 1 percent of people earning more
than $1 million. [...] But someone who earns $20,000 would only
need to spend $2,000 on medical expenses to cross the 10 percent
threshold. And this is also a demographic that is less likely to
have health insurance coverage." [Vox,
11/3/17]
More Than Half Of Those Claiming The Deduction Were 65 Or Older.
According to the AARP, "In 2015, the most recent year that national
level data are available from the IRS, the income thresholds for
itemizing medical expense deductions was 10 percent for taxpayers
under age 65 and 7.5 percent for taxpayers age 65 and older. Roughly
55 percent of the 8.8 million taxpayers claiming the medical expense
deduction in 2015 were age 65 and older and subject to the 7.5
percent income threshold. Today, that threshold is 10 percent of
income for all ages." [AARP,
11/6/17]