2017: Schweikert Voted For The House GOP's 2017 Tax Reform Plan Which Significantly Cut Taxes For The Rich And Corporations And Repealed The Medical Expense Tax Deduction.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, Schweikert 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of other, much smaller deductions, like the medical expense deduction and the property casualty loss deductions, are repealed."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]