A decade of savings gone in a year…
My friends planned to grow old together. That worked, for a while.
He developed Alzheimer’s. Her leg and foot problems trapped her in their home.
Oh, they coped: he remembered how to get to the store. Once there he called her on his cellphone and she guided him, up and down the aisles.
Then, on a chilly spring Saturday morning, she passed.
Years earlier I promised to watch over him if she went first. That he remembered.
Keeping an Alzheimer’s patient in their home costs more than placement in a care facility. About $100,000 a year more. Yet, he wants to be in the home he remembers, surrounded by memories of her – and the two cats they call their children. His doctors feel he’ll live longer in his house and, with laddered CD’s, consumption of the 401 (k) and IRA, and bulls on Wall Street I make that happen.
Helping my work: his doctors’ declarations that the bulk of the care provided by the 24/7 in-home aides is medically necessary. That care plus his many other medical expenses dramatically reduce his taxable income and thereby his tax load. That savings allows me to stretch out his money, giving him more time in his own house.
Or, it used to reduce his taxable income.
Both the House and Senate versions of the Trump tax cuts offset gifts to the Waltons and Kronkes and Gates of the nation by taking away the deductibility of medical expenses in excess of 10% of adjusted gross income.
That change means my friend could now owe $45,000 more per year in taxes.
Congress knew that people like him would be more than inconvenienced by the death of the medical deduction: they don’t care. Just 9,000,000 taxpayers claim that deduction, far less than the portion of taxpayers claiming the mortgage interest deduction. To today’s Republicans, the needs of the many outweigh the needs of the few. Some have to suffer. [ https://www.americanprogress.org/issues/economy/news/2017/11/09/442632/nearly-9-million-americans-claim-medical-expense-deduction/ ]
The other day a high school classmate buried her father. He had a great run, 88 years. Being a good Catholic, he and his wife had 11 children…Yes, a family of 13.
Now, based on the current tax code a family of 13 can take $65,250 off of their taxable income. ($12,600 household Standard Deduction plus 13 x $4,050 in Personal Exemptions) With the Trump dump that same family can only take $24,000 off their base, meaning they’ll be taxed on an additional $41,250 – probably another $9,000 to President Donald and $2,400 to Governor SEAL. [based on an income of around $100,000 a year: less than that and you’d have to start eating the kids http://money.cnn.com/2017/12/02/pf/taxes/senate-tax-bill-passed/index.html & 2016 IRS form 1040]
What, families of 13 – like unhealthy people – don’t deserve sympathy? How about a family of four?
My neighbors have two school age kids, a boy and a girl, making them the archetypical American family. Today they reduce their taxable base by $28,800. ($12,600 household Standard Deduction plus 4 x $4,050 in Personal Exemptions) That too drops to $24,000, meaning that without a significant reduction in their tax rate they’ll pay more too.
Despite the intentional discrimination against those with major health care costs, large families and others groups of Americans, the House and Senate tax proposals still need help paying their bill.
I’ll go into that a bit in Part 2. See you tomorrow.
Submitted by Glenn Koenen, WCD Member