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Ordinary Medical Expenses

9 Pages Posted: 20 Nov 2013 Last revised: 22 Nov 2013

Calvin H. Johnson

University of Texas at Austin - School of Law

Date Written: November 20, 2013


Although extraordinary medical expenses are appropriately deducted to compute a taxpayer’s standard of living, taxpayers should bear ordinary medical expenses out of their post-tax income, with no allowance beyond personal exemptions, the standard deduction, and low tax brackets. The proposal defines ordinary expenses as less than 15 percent of adjusted gross income. Consistently, tax-excluded employer healthcare plans appropriately cover extraordinary medical expenses. The proposal would not allow an exclusion for plans that cover ordinary medical expenses, defined by the same 15 percent level.

The deduction of ordinary medical expenses and the exclusion of insurance plans that cover those expenses cause wasteful inflation of medical costs. Deductions and exclusions to accomplish a subsidy are not a way to help the needy, they inappropriately benefit the highest-bracket taxpayers as if their health and life were worth more.

The proposal is offered as a part of the Shelf Project, a collaboration of tax professionals developing methods of raising revenue, in ways that improve the fairness and efficiency of the tax base. The Shelf Project has 68 proposals so far. Comments are welcome either as public debate, directed to the Tax Notes editor, or privately to

Suggested Citation

Johnson, Calvin H., Ordinary Medical Expenses (November 20, 2013). The Shelf Project, Tax Notes; U of Texas Law, Public Law Research Paper No. 543; U of Texas Law, Law and Econ Research Paper No. 543. Available at SSRN: or

Calvin Harsha Johnson (Contact Author)

University of Texas at Austin - School of Law ( email )

727 East Dean Keeton Street
Austin, TX 78705
United States
512-232-1306 (Phone)
512-232-2399 (Fax)

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