January 21 2011
This week I got a hold of a great new publication by Americans for Tax Reform. It's a comprehensive list of new taxes in the health care law. Sometimes I refer to this law as ObamaCare, because I have a hard time keeping a straight face when I call it by its real name - the Patient Protection and Affordable Care Act.
This publication from ATR reveals in detail just how "affordable" all this new health care will be. Everyone will bear some of this $500-billion burden in new taxes. Even if you and I buy a "qualified" health plan and avoid the individual mandate penalty, and even if you and I don't have income over $200,000 (where many of the tax increases show up), we will feel the effects of these new taxes in a shrunken private sector, slowed wage growth, and more economically challenging years ahead.
Upon my first read of the 2,000-page health bill, I realized that the new taxes were going to awful. I did not, however, grasp the effects of the cap on Flexible Spending Accounts (FSAs) on families with children with special needs. I found this interesting tidbit in the ATR tax list:
Flexible Spending Account Cap - aka "Special Needs Kids Tax"($13 bil/Jan 2013): Imposes cap of $2500 (Indexed to inflation after 2013) on FSAs (now unlimited). . There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education.
The White House and other ObamaCare proponents are having to defend the merits of this onerous law now that the House has passed a repeal. Their best defensive strategy so far has been pointing to the provision that protects people with preexisting conditions. But what do they have to say to this? Did they even realize, in crafting this lengthy, complicated law, that they would raise taxes on special needs families?
This is another example of the bad attitude that government can fix everything with a one-size-fits-all solution. In its effort to help everyone, the government will always ending up hurting some. This time, it's kids with special needs.