, 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.
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.
The latest budget to come out of the White House included
a list of what it calls “tax expenditures.”
The government takes money from people in taxes, and it also spends money on
this and that, but then there’s this third category in which the government
subsidizes one thing or another not directly but through giving tax breaks.
It’s not quite government spending, but it’s something worth keeping track of.
To calculate it, they had to come up with some sort of fictional flat-tax
baseline in which all income is taxed, and then figure out how much the
government “loses” or “spends” by not taxing, say, charitable contributions or
employer contributions for employee health insurance plans.
The TaxProf Blog has a list of
a number of papers
that the Statistics of Income Division of the
IRS
released along with its “tax gap” report.
Constitutionalist tax protester
Irwin Schiff’s
lawyers are trying to convince the court that
he’s insane,
something his thousands of disciples probably wish they knew before they
signed on to his theories.
Next time somebody talks about Big Government Democrats and salutes the Dubya
Squad for starving the beast with its tax cuts, point them at
this article in which Dead-Eye Dick Cheney
brags that the Bush administration’s tax cuts have boosted federal government
revenue:
Vice President Cheney said Thursday night that the verdict is in before the
Bush administration’s new tax analysis shop has even opened for business: Tax
cuts boost federal government revenue.
That assertion won applause from his audience at the Conservative Political
Action Conference…
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