[Congressional Record Volume 151, Number 104 (Wednesday, July 27, 2005)]
[Senate]
[Pages S9185-S9186]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DeMINT (for himself, Mr. Nelson of Florida, Mr. Isakson, 
        Mr. Dayton, Ms. Murkowski, and Mr. Enzi):
  S. 1514. A bill to amend the Internal Revenue Code of 1986 to repeal 
the medicine and drugs limitation on the deduction for medical care; to 
the Committee on Finance.
  Mr. DeMINT. I rise today to offer a bill that would amend the medical 
and dental expense income tax deduction so that nonprescription or 
over-the-counter drugs would be allowed as a deductible expense for 
taxpayers who itemize their deductions.
  Currently, the IRS list of qualifying medical expenses does not 
include OTCs; this bill makes them a qualifying medical expense. The 
bill does this by striking the subsection that limits the deduction for 
drug expenses to prescription drugs and insulin. It also makes it 
easier for people to reach and exceed the 7.5 percent threshold.
  I believe this bill will be particularly helpful for low income 
taxpayers and those with high healthcare expenses. Over 5 percent of 
tax filers currently claim the deduction for medical and dental 
expenses. Additionally, individual taxpayers can also claim the medical 
expenses of their spouses and dependent children--so pediatric cough 
syrup bought by parents for their children would be deductible if OTC 
medical expenses allowed.
  This bill recognizes that over-the-counter drugs may be a big cost 
for some individuals and families. In addition, Americans using a 
Flexible Spending Account or Health Savings Account get preferred tax 
treatment for OTCs, but Americans without them do not. Tax treatment of 
prescription and non-prescription drugs should be equal in this area.
  I am grateful to Senator Bill Nelson for joining me as a lead sponsor 
of this bill. I am also pleased that Representatives Melissa Hart and 
Mike Ross have introduced companion legislation in the House. These 
individuals understand that reducing the cost of medicine is a goal we 
should all support. I urge my Senate colleagues to support this bill.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1514

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``OTC Medicine Tax Fairness 
     Act of 2005''.

     SEC. 2. REPEAL OF MEDICINE AND DRUGS LIMITATION ON DEDUCTION 
                   FOR MEDICAL CARE.

       (a) In General.--Section 213 of the Internal Revenue Code 
     of 1986 (relating to medical, dental, etc., expenses) is 
     amended by striking subsection (b).
       (b) Conforming Amendment.--Section 213(d) of such Code is 
     amended by striking paragraph (3).
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

  Mr. NELSON of Florida. Mr. President, I am pleased to join my 
colleague Senator Jim DeMint as we introduce the OTC Medicine Tax 
Fairness Act of 2005.
  Health care costs are continuing to climb across America and the 
medical expense deduction is becoming increasingly popular as Americans 
spend more out-of-pocket for health care. The OTC Medicine Tax Fairness 
Act of 2005 is designed to help make medicine more affordable by 
allowing consumers to include over-the-counter, OTC, drugs as a 
deductible expense for people who itemize their deductions.
  Under the OTC Medicine Tax Fairness Act of 2005, OTC medicines would 
be allowed as tax deductible medical expenses. Under current law, 
taxpayers who itemize income tax deductions may deduct out-of-pocket 
expenses for medical care not reimbursed by health insurance, provided 
it exceeds 7.5 percent of their adjusted gross income. Eligible 
expenses under the tax code currently include non-reimbursed costs for 
doctor visits, bandages, crutches, acupuncture, chiropractic care, 
hearing

[[Page S9186]]

aids, and eyeglasses. The code also allows the costs of drugs, but only 
prescription drugs and insulin; OTCs are not included in the deduction 
currently. This legislation recognizes that OTC medicines may be a big 
cost for some individuals and families and that tax treatment of 
prescription and non-prescription drugs should be equal in this area.
  The medical expense deduction is particularly helpful for low income 
taxpayers with high health care expenses. Taxpayers in the lower income 
brackets use the medical expense deduction more frequently than higher 
income earners. According to the IRS website, over 3 million taxpayers 
with incomes of $20,000 or less used the medical expense deduction in 
2001. This bill would help low income people with high medical expenses 
by allowing them to deduct the cost of OTCs.
  This legislation would also provide much needed fiscal relief for 
many seniors. According to U.S. Department of Labor statistics, seniors 
purchase more OTC drugs than any other age group. This bill would help 
those elderly Floridians, as well as all elderly Americans, who use 
OTCs and take the medical expense deduction.
  American consumers are currently paying extraordinary prices for 
their medications. It is time for Congress to help make medicine more 
affordable. One thing we can do is to make sure that as more drugs 
become available without prescriptions that their costs can still be 
included in tax- deductible health care expenses. If we can do that, we 
will have done a great deal.
  Mr. President, I request unanimous consent that my statement be 
included in the Record.
                                 ______