September 28, 2009

JUST LET US ROLL THEM OVER IN PERPETUITY (via The Other Brother):

The Fight Over Flexible Spending Accounts (RON LIEBER, 9/29/09, NY Times)

Flexible spending accounts allow people to take money out of their paychecks before paying taxes on it and to set it aside to use for health care expenses that insurance doesn’t cover. There is no legal limit on how much you can set aside each year, though employers generally set a cap around $4,000 or $5,000.

Senator Max Baucus, Democrat of Montana and author of the Senate health care bill, would like to place a much lower $2,500 annual limit on what people can save, among other restrictions. The House-Senate Joint Committee on Taxation figures this will allow the government to take in $14.6 billion from 2011 and 2019. So far so good right? We have to pay for the health care bill somehow.

The problem, however, is that to people who put more than $2,500 away each year, this looks an awful lot like a tax increase. After all, if they can’t put as much money aside, they’ll pay more in income and payroll taxes. And President Obama, when he was running for office, promised that no family earning under $250,000 would see higher taxes.

Now, a not-quite grass-roots effort has sprung up, led by companies that administer flexible spending accounts and others. At savemyflexplan.org, the group encourages individuals to write their representatives in Washington and sound off.


Posted by Orrin Judd at September 28, 2009 7:08 PM
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