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host · 01-22-2007, 02:30 AM

flstf, according to the 2006 tax prep. IRS guidelines:

http://www.irs.gov/publications/p502/ar02.html

If you pay $6k annually out of pocket with net income dollars, and you make $40k per year, you can deduct the excess of 7-1/2 percent of your adjusted gross income. If you have a file your tax return with a family of 3 standard deduction, for simplicity's sake, I'll use a round number of a $30k adjusted gross, defined as adjusted by subtraction of $10k standard deduction.

$30k X 7.5 percent= $2250. $6000 medical insurance expense, less $2250 equals $3750 eligible for deduction from taxable adjusted gross income.

This adjustment, coupled with, for example, with $6000 of deductible mortgage interest, $2000 deductible property tax, $300 deductible vehicle tax, $500 deductible charitable donation expense, and your total deduction could then exceed the original $10,000 standard deduction,
$6000 + $3750 + $2000 + +500 + $300, and now your total deductions are $12,500 instead of the original $10,000 standard deduction.

Deductions for medical treatment co-pay expenses, prescription expenses, transportation expenses, tax preparation fees, originally ineligible because the $40k annual earner could not "beat" the $10k standard deduction, become eligible when the $3750 medical insurance premium deduction allows the taxpayer to exceed the original $10k standard deduction.

To sum it up, under the current taxation structure, the "little guy", with a modest income and deductions formerly too small to exceed the standard deduction, receives income tax reduction on a significant portion of his out of pocket medical premium expense.

The purpose of the "standard" deduction allowance is to simplify tax filing and the "standard" includes consideration of "average" deductions for a single or a couple with "X" number of child dependents and an average size mortgage interest and property tax deduction, or a renter with a similar income.

So, there is already an allowance for payment of some medical and medical insurance expenses factored into the standard deduction tax tables.

The status quo is that the tax system is progressive, but skewed in favor of those who earn income above $90k because SSI & Medi tax withholding stops there.

Recently I posted a table from the census.gov site that illustrated how few singles exceed an annual household income of $80K per year, and how few multi-person households exceed income of $150k.

If your income exceeds "average" or mean, the system is designed for you to pay a progressively higher tax than the lower 2/5 ths of tax filers earn.

Bush's "reform" would reverse that and shift some of the tax burden for financing universal insurance premiums, to those who already spend everything that they earn on necessities.

No one expects that employees who work for firms that offer above average pension, vacation, or holiday benefits, to suddenly pay a tax to subsidize those who work for less generous or prosperous employers. Many law enforcement personal are permitted to retire, with immediately redeemable taxpayer paid retirement benefits, after just 20 years of employment.

Should those favored employees pay a tax to subsidize those of us who must work until age 66 to qualify for pension benefits?

The wealthiest are experiencing the initial stages of a period when their percentage of total income taxes paid by all tax payers will shift to the tiers under their tier. Would it not be fairer to levy an excess profits tax or a markup "cap" on insurance company medical coverage premiums, or a higher capital gains tax on stockholder dividends and gains from stock sales in that industry? Should the "little guy" with most of his medical premiums provided as a company benefit, pay more, along with the modest income earner who shoulders is entire health insurance premium cost, because Bush's government failed to secure the borders or to enforce laws that prohibit illegal residency?

Should the average or below average income employee with a health insurance employment benefit, be taxed to pay the added cost built into health insurance premiums because the federal government refuses to fully reimburse county and municipal hospitals for providing care to elderly or welfare patients, or to the uninsured? The government and private policy holders are paying for all of the medical care, for everyone in the country, and they always have.

The Bush administration and congress have refused to put policies in place to manage how this care is dispensed, resulting in huge and avoidable expenses shifted to public hospitals who end up operating emergency rooms that are used as outpatient clinics of last resort by the indigent and the uninsured, and by expensive treatment actual emergencies that could have been diagnosed and treated much more cheaply if medical clinics were available to routinely diagnose and treat less severe ailments at a much earlier stage in the progression of an illness or disorder.

This official, intentional neglect is further aggravated by the abandonment of the inner cities by government. Increasingly unequal wealth distribution, ignorant and ineffective illegal drug distribution and abuse enforcement, economics driven segregation, and illegal immigration, and the elimination of living wage employment opportunities formerly available to inner city residents before the disappearance of the American industrial manufacturing base, along with the withdrawal of the will of the federal government to encourage or provide affordable housing and equal public education, results in higher incidence of homelessness and violence that ends up at the doorstep of already overburdened and under supported urban public hospitals.

Bush is proposing another wealth shift from the wealthiest to the rest of us, and it's bullshit.

01-22-2007, 02:30 AM	#8 (permalink)
host Banned	flstf, according to the 2006 tax prep. IRS guidelines: http://www.irs.gov/publications/p502/ar02.html If you pay $6k annually out of pocket with net income dollars, and you make $40k per year, you can deduct the excess of 7-1/2 percent of your adjusted gross income. If you have a file your tax return with a family of 3 standard deduction, for simplicity's sake, I'll use a round number of a $30k adjusted gross, defined as adjusted by subtraction of $10k standard deduction. $30k X 7.5 percent= $2250. $6000 medical insurance expense, less $2250 equals $3750 eligible for deduction from taxable adjusted gross income. This adjustment, coupled with, for example, with $6000 of deductible mortgage interest, $2000 deductible property tax, $300 deductible vehicle tax, $500 deductible charitable donation expense, and your total deduction could then exceed the original $10,000 standard deduction, $6000 + $3750 + $2000 + +500 + $300, and now your total deductions are $12,500 instead of the original $10,000 standard deduction. Deductions for medical treatment co-pay expenses, prescription expenses, transportation expenses, tax preparation fees, originally ineligible because the $40k annual earner could not "beat" the $10k standard deduction, become eligible when the $3750 medical insurance premium deduction allows the taxpayer to exceed the original $10k standard deduction. To sum it up, under the current taxation structure, the "little guy", with a modest income and deductions formerly too small to exceed the standard deduction, receives income tax reduction on a significant portion of his out of pocket medical premium expense. The purpose of the "standard" deduction allowance is to simplify tax filing and the "standard" includes consideration of "average" deductions for a single or a couple with "X" number of child dependents and an average size mortgage interest and property tax deduction, or a renter with a similar income. So, there is already an allowance for payment of some medical and medical insurance expenses factored into the standard deduction tax tables. The status quo is that the tax system is progressive, but skewed in favor of those who earn income above $90k because SSI & Medi tax withholding stops there. Recently I posted a table from the census.gov site that illustrated how few singles exceed an annual household income of $80K per year, and how few multi-person households exceed income of $150k. If your income exceeds "average" or mean, the system is designed for you to pay a progressively higher tax than the lower 2/5 ths of tax filers earn. Bush's "reform" would reverse that and shift some of the tax burden for financing universal insurance premiums, to those who already spend everything that they earn on necessities. No one expects that employees who work for firms that offer above average pension, vacation, or holiday benefits, to suddenly pay a tax to subsidize those who work for less generous or prosperous employers. Many law enforcement personal are permitted to retire, with immediately redeemable taxpayer paid retirement benefits, after just 20 years of employment. Should those favored employees pay a tax to subsidize those of us who must work until age 66 to qualify for pension benefits? The wealthiest are experiencing the initial stages of a period when their percentage of total income taxes paid by all tax payers will shift to the tiers under their tier. Would it not be fairer to levy an excess profits tax or a markup "cap" on insurance company medical coverage premiums, or a higher capital gains tax on stockholder dividends and gains from stock sales in that industry? Should the "little guy" with most of his medical premiums provided as a company benefit, pay more, along with the modest income earner who shoulders is entire health insurance premium cost, because Bush's government failed to secure the borders or to enforce laws that prohibit illegal residency? Should the average or below average income employee with a health insurance employment benefit, be taxed to pay the added cost built into health insurance premiums because the federal government refuses to fully reimburse county and municipal hospitals for providing care to elderly or welfare patients, or to the uninsured? The government and private policy holders are paying for all of the medical care, for everyone in the country, and they always have. The Bush administration and congress have refused to put policies in place to manage how this care is dispensed, resulting in huge and avoidable expenses shifted to public hospitals who end up operating emergency rooms that are used as outpatient clinics of last resort by the indigent and the uninsured, and by expensive treatment actual emergencies that could have been diagnosed and treated much more cheaply if medical clinics were available to routinely diagnose and treat less severe ailments at a much earlier stage in the progression of an illness or disorder. This official, intentional neglect is further aggravated by the abandonment of the inner cities by government. Increasingly unequal wealth distribution, ignorant and ineffective illegal drug distribution and abuse enforcement, economics driven segregation, and illegal immigration, and the elimination of living wage employment opportunities formerly available to inner city residents before the disappearance of the American industrial manufacturing base, along with the withdrawal of the will of the federal government to encourage or provide affordable housing and equal public education, results in higher incidence of homelessness and violence that ends up at the doorstep of already overburdened and under supported urban public hospitals. Bush is proposing another wealth shift from the wealthiest to the rest of us, and it's bullshit.