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Kreitlow-Dexter Middle Class Health Care Tax Cut Bill Gets Hearing

Wednesday, February 17, 2010

Kreitlow-Dexter Middle Class Health Care Tax Cut Bill Gets Hearing

Chippewa Valley Legislators Call on Senate Health Committee to Pass Legislation Soon

MADISON – Legislation that would help provide tax relief to middle class taxpayers who make contributions to health insurance plans known as Health Savings Accounts (HSA’s) received a positive reception during a public hearing at the State Capital on Wednesday. The bill’s authors, Senator Pat Kreitlow (D-Chippewa Falls) and Representative Kristen Dexter (D-Eau Claire) both testified in favor of the legislation.

“Our bill offers tax relief for lower and middle income families while also helping control the cost of health care, one of the major forces driving down wages in Wisconsin,” said Dexter. “During these difficult times, we need to do everything possible to help working families balance their budgets and we believe this bill will go a long way towards doing just that.”

SB 425/AB 639 provides tax relief for middle income individuals and households who choose to contribute to a Health Savings Account. Currently, contributions to an HSA are doubly taxed—employees are taxed on their HSA contributions and an employer’s contributions are taxed as wages. This bill would change current law to allow individuals and families under 500% of the Federal Poverty Level (FPL) to be eligible for a tax credit on their yearly contribution to their HSA. This would allow for a tax credit to those with current income maximums of $54,150 for an individual and of $110,250 for a family of four.

“While this legislation does not solve the health care crisis in our country it will make health insurance more affordable for many Wisconsinites, particularly the middle class who have really felt the pinch of this economic crisis,” said Kreitlow. “I’m hoping my Democratic colleagues will see the significance of this targeted tax relief and move this important piece of legislation forward.”

The Chippewa Valley legislators introduced the legislation at the request of numerous local business groups, including the Eau Claire Chamber of Commerce. Support for the bill was also one of the top issues on both the Chippewa Valley Rally Legislative Agenda last month.