Here’s the first thing I’ve found in the Health Care Reform Bill that give light to the lie of “we won’t raise the taxes of those making less than $250,000 to fund the bill.”
In 2013 FSA contributions will be capped at $2500 down from $4000 to $5000 currently. You will also no longer be able to use FSA to purchase over the counter items like aspirin, band aids or cold and flu medication. How is this raising taxes?
You put money into your FSA from your pre-taxed income. If you have a plan that has a $3000 deductible you can no only plan to cover $2500 with your FSA account so you will be on the hook for the last $500 out of your post tax income and now paying taxes on $500 you did not before.
Or, more broadly, you maxed out your FSA at $4000 each year because you have medications you need each month, a $1500 deductible and two kids who get colds and banged up. You used the FSA each year to cover these items, which can also cover saline solution, humidifiers, thermometers and many OTC birth control options. You did this because you aren’t the best at budgeting and being on a tight budget it helped to not pay taxes on that $4000 each year. Now you’re on the hook for $1500 in taxes you weren’t before.
Yet, I’m being told I won’t pay more taxes. Actually, I will because we use the FSA to lessen our tax burden each year. Though it is somewhat honest. I’m not paying a new tax, I’m just having to pay on an old tax I never did before.