TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, July 13, 2018

House Panel Passes $1,000 Tax Break For Gym Memberships, Exercise Classes: 'It Violates Every Principle Of Tax Policy'

Wall Street Journal, House Panel Passes Tax Break for Gym Memberships, Exercise Classes:

Taxpayers would be able to claim new breaks for gym memberships, exercise classes and other fitness expenses under a bipartisan bill advanced Thursday in the House of Representatives.

The bill would consider those costs as medical expenses for tax purposes, enabling people to use tax-advantaged health-savings accounts and flexible spending accounts to pay for them. The break would be capped at $500 a year for individuals and $1,000 for joint filers. It would reduce federal revenue by $3.5 billion over a decade.

“It’s about a fundamental shift to our approach to health care, to focus on healthy living,” Rep. Jason Smith (R., Mo.), said before the House Ways and Means Committee approved the bill 28-7.

The money can be used for safety equipment but it couldn’t be used for books or videos or for costs associated with golf, sailing, horseback riding or hunting. Rep. Ron Kind (D., Wis.) said he hoped that as the bill advances, it would be expanded to cover sports equipment, especially for children.

Fitbit, the American Heart Association and the Sports and Fitness Association have reported lobbying on the bill.

The benefit would mostly go to high-income households that are purchasing gym memberships anyway, said Leonard Burman, a fellow at the Urban Institute who was a Treasury Department tax official during the Clinton administration. “Every principle of tax policy is violated by this,” he said. “It’s not at all clear that it would have any effect on overall health of the population or that it’s a particularly effective way to make people healthy.”

The bill would create a new tax break just months after Congress passed a tax overhaul bill that limited tax breaks in the name of simplification.

Forbes, Would A $1,000 Tax Deduction Get You Off The Couch And Into The Gym?:

Let me be clear -- I love this bill. I am a firm believer that for all of the sin taxes the government assesses on things like smoking and drinking, it is certainly not beyond Congress to provide incentive for healthy behavior. But while I may have no problem with the motivation behind HR 6312, unfortunately, I've got THREE issues with its execution.

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