, I highlighted some of the tax resistance tidbits that stacked up in my inbox while I was away in México. , some tax policy and budget news of possible interest to those of us doing tax resistance.
The biggest item of news was Dubya’s state-of-the-union push for expanded Health Savings Accounts. He made it enough of a priority that his partisans in Congress will probably work to try to make it happen, and, unlike his grandiose and botched Social Security plan, it’s a small enough nibble of a program that they might just be able to patch something together and put it on his desk.
One summary of Dubya’s plan goes like this:
Health Savings Accounts (HSAs). These are IRA-like accounts that must be used in conjunction with high-deductible health insurance. The proposals:
- Double break for non-group high-deductible premiums. Individuals buying their own high-deductible health insurance — i.e., individuals with no employer plan — would be allowed a full above-the-line deduction for the premiums and a 15.3% refundable credit on the premiums paid. The credit is designed to give the individual insurance purchaser the same tax benefit as an employee with coverage through the employer.
- Increase maximum HSA deduction to policy out-of-pocket maximum. Current law limits HSA contributions to the lesser of the maximum out-of-pocket costs under the plan or $5,450 ($2,650 for single coverage). The budget proposes to eliminate the dollar limits.
- Refundable health premium tax credit for low-income individuals. A limited tax credit of up to 90% of premiums paid on high-deductible health policies would be available to single taxpayers with an AGI of up to $15,000. The credit would be 50% for taxpayers with up to $20,000 AGI, with the benefit phased out between $20,000 and $30,000. The credit would be refundable, which means it would operate as a subsidy. The credit is capped at $1,000 annually.
These items are designed to put individuals without employer coverage on the same tax footing as employees in terms of health care tax benefits. They are also designed to address criticisms that the HSA program is only good for wealthy taxpayers.
All other things being equal, this plan would be very good news for those of us tax resisters practicing The DON Method.