By U.S. Representative Martha McSally (AZ-2)
America’s seniors deserve a secure retirement without the constant worry of how to make ends meet. Washington should be helping in this effort, not making it harder. But that’s not what’s happening.
Tucked away into the President’s health care law is a little-known tax increase that’s scheduled to hit seniors in 2017. If allowed to go forward, they will find themselves facing hundreds of dollars in higher taxes – at a time when many can least afford it.
Currently, the IRS allows Americans with high health care costs to deduct certain out-of-pocket expenses from their taxes. This deduction makes a big difference for those battling high medical costs as a result of sickness or age-related complications.
Before the Affordable Care Act, seniors could deduct out-of-pocket medical costs that exceeded 7.5 percent of their Adjusted Gross Income (AGI). Starting in 2017, however, the law increases this threshold to 10% of a person’s AGI – effectively lowering how much can be deducted at the end of the year and increasing how much seniors will pay in taxes.
This tax hike will disproportionally hit America’s oldest and most vulnerable populations. Seniors make up more than half of those claiming the medical expense deduction.
If the threshold is raised, many seniors who have saved for their entire lives and have carefully planned for retirement will suddenly be faced with hundreds of dollars in extra taxes—on top of the out-of-pocket medical costs they already pay. That’s simply unacceptable.
Last year, I introduced bipartisan legislation to halt this obscure tax increase on seniors. Since then, we’ve worked hard to build broad support inside of Congress and out. The bill has the endorsement of a list of taxpayer and seniors advocacy groups and passed the U.S. House of Representatives on a bipartisan vote on September 13, 2016.
For many aged 65 and older, times are already tough. Since 2005, health care costs have risen faster than inflation every year except 2008. We need to be working to make retirement more secure for the 130,000 seniors living in Southern Arizona who I represent and the millions of others across the country. I’ll continue to fight to make that happen.