Flexible Spending Accounts
I just finished filing medical and child care flexible spending reimbursements. Have you ever stopped to think about what an incredible waste of time, energy, and money this type of program is?
There is a huge administrative structure that requires work by corporations, the government, and each individual citizen that costs all of them time, money, and energy. The government has to define the rules and set up monitoring to ensure they're followed. Each corporation has to set up and administer a plan. Each citizen has to bet some of their money that they'll incur at least a specific amount of allowable expenses. Then each citizen has to record and file paperwork to document the expenses they did incur. Someone has to administer the paperwork and funding transfers for all of this.
And what is the purpose? To reduce the tax impact on individuals. This has to be the least efficient way possible to avoid giving the federal government some of your money. Imagine how much more efficient it would be to just reduce the tax rate for people earning less than X by some small percentage!
Perhaps worst of all, this type of program is likely to miss helping those most in need; those who work for companies that do not provide flexible spending accounts, or who don't have the time or knowledge to participate.
The most significant beneficiaries of this type of program are the lawyers and accountants who have a new line of business in setting up and maintaining these plans.
Next time you hear someone propose a stupid idea like this, make sure to let your Congressman know that they need to find a better way to offset the costs of child care and health care on working Americans.