SENIOR ASSEMBLY FEDERAL PROPOSAL NO. 7

INTRODUCED BY SENIOR ASSEMBLY MEMBER LOPES

LEGISLATIVE COUNSEL'S DIGEST

AFP 7: FEDERAL INCOME TAX: DEDUCTIONS: MEDICAL EXPENSES

UNDER EXISTING LAW, FOR PURPOSES OF CALCULATING HIS OR HER FEDERAL INCOME TAX LIABILITY, AN INDIVIDUAL MAY DEDUCT FROM HIS OR HER TAXABLE INCOME THE AMOUNT BY WHICH HIS OR HER TOTAL MEDICAL EXPENSES FOR THE YEAR EXCEED 7.5% OF HIS OR HER ADJUSTED GROSS INCOME.

THIS MEASURE WOULD MEMORIALIZE THE CONGRESS AND THE PRESIDENT TO ENACT LEGISLATION THAT WOULD PERMIT ANYONE 65 YEARS OF AGE OR OLDER TO DEDUCT ALL MEDICAL EXPENSES FROM HIS OR HER TAXABLE INCOME FOR PURPOSES OF CALCULATING HIS OR HER FEDERAL INCOME TAX LIABILITY.

VOTE: MAJORITY.

AFP 7: RELATING TO FEDERAL INCOME TAX DEDUCTIONS

WHEREAS, MEDICAL COSTS INCREASE EACH YEAR, MAKING IT DIFFICULT FOR SENIOR CITIZENS TO PAY FOR THESE INCREASING EXPENSES; AND

WHEREAS, MOST SENIOR CITIZENS LIVE ON FIXED INCOMES; AND

WHEREAS, THE AMOUNT DEDUCTIBLE FOR MEDICAL EXPENSES ON A FEDERAL INCOME TAX RETURN IS THAT AMOUNT IN EXCESS OF 7.5 PERCENT OF ADJUSTED GROSS INCOME; AND

WHEREAS, FOR A SENIOR CITIZEN COUPLE WITH AN ADJUSTED GROSS INCOME OF $40,000, FOR EXAMPLE, ONLY THOSE MEDICAL COSTS ABOVE $3,000 CAN BE DEDUCTED FROM THEIR TAXABLE INCOME ON THEIR FEDERAL INCOME TAX RETURN; AND

WHEREAS, THE PRESENT FORMULA OF 7.5 PERCENT OF ADJUSTED GROSS INCOME HAS A NEGATIVE EFFECT ON SENIOR CITIZENS AND SHOULD BE ELIMINATED; AND

WHEREAS, THE INCOME LOST TO THE FEDERAL GOVERNMENT WOULD PALE COMPARED TO THE ECONOMIC AND HUMANE BENEFIT GRANTED TO SENIOR TAXPAYERS; NOW, THEREFORE, BE IT

RESOLVED, BY THE SENIOR ASSEMBLY AND THE SENIOR SENATE, JOINTLY, THAT THE SENIOR LEGISLATURE OF THE STATE OF CALIFORNIA AT ITS 2008 REGULAR SESSION, A MAJORITY OF THE MEMBERS VOTING THEREFOR, HEREBY PROPOSES THAT ANYONE 65 YEARS OF AGE OR OLDER BE PERMITTED TO DEDUCT ALL MEDICAL EXPENSES FROM HIS OR HER TAXABLE INCOME FOR PURPOSES OF CALCULATING HIS OR HER FEDERAL INCOME TAX LIABILITY; AND BE IT FURTHER

RESOLVED, THAT THE SENIOR LEGISLATURE OF THE STATE OF CALIFORNIA RESPECTFULLY MEMORIALIZES THE CONGRESS AND THE PRESIDENT TO ENACT APPROPRIATE LEGISLATION THAT WOULD ADDRESS THE CONCERNS SET FORTH IN THIS MEASURE; AND BE IT FURTHER

RESOLVED, THAT A COPY OF THIS MEASURE BE TRANSMITTED TO THE PRESIDENT AND VICE PRESIDENT, THE SPEAKER OF THE HOUSE OF REPRESENTATIVES, THE CHAIRPERSONS OF THE HOUSE AND SENATE COMMITTEES ON AGING, AND TO EACH SENATOR AND REPRESENTATIVE FROM CALIFORNIA IN THE CONGRESS OF THE UNITED STATES.

RN 08 22073

- 0 -