Saturday, August 7, 2010

How Obama is about to screw the neediest of the lower middle class

Actually, he's already done it. I know, I know, he said he wouldn't raise taxes on anyone making under $250,000 per year. The buck stops with him, he made a campaign promise. He gave his word.

Please stop laughing in the peanut gallery. We're trying to have a serious discussion here.

This has to do with Flexible Spending Accounts. Now, lets be clear. An FSA is not an entitlement program like Obamacare. It's a tax cut. It allows you to specify a specific amount of money you want your employer to withhold from your paycheck throughout the year, and this money can be used, PRE-TAX, for medical expenses. In other words, no tax on medical expenses. The catch, of course, is that if you don't use it, you lose it. No big deal, just lowball it a bit and you get a great deal.

Roughly 20% of employees take advantage of an FSA account. Of the 20% that participate, 80% of them keep their annual contributions under $2500 (significance of this number discussed below).

Currently, there is no Federal cap on how much you contribute, although most employers place their own cap. My employer has two programs, with caps at either $4000 or $5000. The former program works better for us. Due to my daughters medical expenses, we use every penny of this $4000 every year and it is a huge help. Many other families with special needs kids have used it to great benefit also.

But Obama has to raise taxes somewhere. And this is a way to do it that won't bring a lot of news media or attention. An added benefit? It only effects those who REALLY need medical care, and will be forced to upgrade to more overpriced, government mandated plans that give the same coverage to special needs kids as to kids with runny noses.

So, in 2011 all over the counter medications will need a doctors order to be FSA eligible. Wow, that sounds cost saving. Where before I could have just gone and got the $10 worth of medicine, now I'll have to take them to a doctors appointment which is a $20 co-pay typically and counts towards my FSA limit.

On top of that, in 2013 the government will cap the FSA contributions at $2500. More revenue for them, more taxes for those in need of medical care. Win-Win for Obama.

Glad that he's looking out for the little man. I feel so cared for.

For more information, click here.

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