Restructured tax code would unduly burden people with disabilities

Restructured tax code would unduly burden people with disabilities
© Getty Images

 

As Congress looks at ways to restructure and overhaul the tax code, it is clear there is at least one demographic that will not benefit: people with spinal cord injuries or other disabilities. And yet in its current form, the bill contains two highly onerous provisions that would result in undue burdens for the larger disability community.

First, the bill passed on Nov. 16 by the U.S. House of Representatives would eliminate a valuable deduction used by millions of people, including thousands with spinal cord injury, who face high medical bills. This allows taxpayers to deduct medical expenses for themselves and dependents that exceed more than 10 percent of their adjusted gross income.

ADVERTISEMENT
Under the House’s plan, unreimbursed costs for expenses that make it possible for people with disabilities to maintain the quality of life they deserve would no longer be deductible. This includes:

 

  • Wheelchairs, including operation and maintenance costs
  • Money paid for transportation – including bus, taxi, train, plane or ambulance services – for medical care for people with disabilities, as well as their caregivers
  • Installing specialized medical equipment in a patient’s home or vehicle
  • Physical therapy
  • Prosthetics
  • Expenses related to the costs of buying, training and maintaining a service animal
  • Improvements to a property rented by a person with a disability, such as special plumbing fixtures
  • Bills from out-of-network doctors

About nine million people used the medical expense deduction in 2015 (the latest year information is available), claiming an estimated $87 billion in deductions.

This means that those who utilized the deduction — it’s only available to taxpayers who itemize their deductions — have extraordinarily high out-of-pocket health care costs. Additionally, many disabled Americans who file their own taxes may not realize the deduction even exists and, therefore, have not taken advantage of it.

For those who utilize it, however, the deduction is incredibly important to ensuring their financial well-being. The majority of those who claim the deduction have incomes of less than $75,000. They’re also the most vulnerable Americans: people already carrying catastrophic medical issues and the accompanying expenses, often with this deduction serving as the only barrier between them and poverty.

Shirking ADA compliance

A second provision would reduce the progress made over the last few decades to improve public access for people with disabilities.

Currently, small businesses can get a tax credit — the Disabled Access Credit — on any improvements they make to their facilities to make them more accessible. This credit has been vital for pushing back against (while providing a financial incentive to) businesses that claim it’s too expensive to comply with the Americans with Disabilities Act (ADA), despite having more than 26 years to become compliant.

The House bill eliminates this credit. Even worse, it comes on the heels of the House introducing legislation that would weaken the rights afforded by the ADA.

In a perfect world, disabled Americans wouldn’t have to rely on tax credits and medical deductions to achieve their basic medical needs and keep their families from going bankrupt.

But in the current fiscal climate, tax deductions are a workable alternative. Ideally, businesses would take into account the needs of all people before (and after) opening their doors, and tax incentives provided to simply adhere to existing law wouldn’t be necessary. However, this is not a perfect world.

What Congress and you can do

Congress might not be proactively trying to place additional burdens on mobility-impaired Americans, who already face obstacles to employment, disproportionate medical expenses and financial hardships. And it might not intend to exacerbate compliance issues with the vital laws that protect people with disabilities.

The reality, though, is that the needs and basic rights of people with disabilities aren’t being considered at all, a problem this population has experienced for a very long time.

There is hope. The Senate can change that by making sure that the removal of these two important tax credits is not included in its version of the bill and proving that it truly values the members of a community that is regularly overlooked. I encourage people with disabilities, as well as anybody who knows someone living with a disability, to call their representatives and educate them on the debilitating effects that will inevitably result from these provisions.

Peter Wilderotter is the president and CEO of the Christopher & Dana Reeve Foundation, a nonprofit dedicated to curing spinal cord injury by funding innovative research, and improving the quality of life for people living with paralysis through grants, information and advocacy.