A Missouri congressman is leading a bipartisan effort to allow tax-free savings accounts for buying fitness and sports equipment — including golf clubs.
Tax-exempt health savings accounts and flexible spending accounts can currently only be used for medical expenses. U.S. Rep. Jason Smith has introduced a bill that would allow them for anything that promotes physical activity, including fitness equipment, gym memberships and workout videos.
Smith, a Republican whose district stretches across southeast Missouri, said he knows from experience that it’s more cost-effective to prevent medical conditions than treat them. After losing 60 pounds he was able to stop taking medications for high blood pressure and cholesterol.
“I’m a prime example of how physical activity lowers the cost of health care,” Smith said.
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The bill has been promoted by big-name athletes like Herschel Walker and Carl Lewis in the past, and it would be a boon to Kansas City-based UMB Bank, which is one of the nation’s top players in the health savings account market.
But would it make people healthier?
Renu Zaretsky, a writer for the Tax Policy Center, is skeptical.
Zaretsky’s think tank is a joint venture of the Urban Institute and the Brookings Institution. She wrote a blog post last year about the previous version of Smith’s bill, which is called the Personal Health Investment Today, or PHIT Act.
Zaretsky noted that the bill allows tax-free dollars to purchase golf clubs, though probably only one or two at a time because the legislation limits sports purchases to $250 per transaction. She also said a nonprofit group lobbying for the legislation, PHIT America, includes a number of sponsors from the golf world.
Zaretsky comes from a family of avid golfers, but she’s not sure it’s a great fitness plan, especially if you use a cart.
“Is golf the best exercise for calorie burn for your buck?” Zaretsky said in a phone interview.
She said the bill is broad enough that it potentially could be used to buy equipment for more sedentary sports like fishing.
Smith said he envisioned low-income families using the bill to keep their kids in organized sports, which can cost hundreds or even thousands of dollars a year for equipment and registration fees.
But he also said golf clubs are on the table.
“If it promotes physical activity that is something they could purchase without taxes,” Smith said.
It’s unlikely that low-income families would benefit much, Zaretsky said, because most of them don’t use health savings accounts.
Higher earners have been more likely to use the accounts, she said. That includes her brother-in-law, who she said disagreed with her on golf’s potential to improve physical fitness.
“But he doesn’t need that tax expenditure,” Zaretsky said. “He’s doing fine.”
Smith’s bill, introduced in March, had 19 Democrats and 12 Republican co-sponsors as of Monday.
He said he’s open to tightening the language to prevent fraud and abuse, if need be.