|
Benefits of Administration’s HSA Proposals
Skewed to Higher-Income Households |
| |
A Family Making:
|
| |
$15,000
|
$40,000
|
$180,000
|
Contribution to HSA
|
$1,000 |
$1,000 |
$1,000 |
$10,500 |
Tax Bracket
|
0% |
15% |
28% |
28% |
Value of HSA Deduction
|
$0 |
$150 |
$280 |
$2,940 |
Value of Tax Credit
|
$153 |
$153 |
$153 |
$1,607 |
Total Tax Subsidy
|
$153 |
$303 |
$433 |
$4,547 |
A family making $180,000 would receive more than twice as large a tax subsidy from the Administration’s new HSA proposals as a family making $15,000 if both families contributed the same amount ($1,000) to an HSA. Moreover, higher-income families could afford to contribute much more to HSAs than less-affluent families, and thus could reap much larger tax benefits from the Administration’s proposal to raise the annual HSA contribution limits to $10,500 per family. |
