There's this vascular surgeon and he makes $280,000 a year. "Wow, that's a lot of money", say the practitioners of resentment and jealousy....And they proceed to say that this (1%) individual needs to pay more to the federal government in taxes.........................................................................................Of course what these same practitioners neglect or refuse to tell you is that this person had to also undergo 11-12 years of education (often involving massive student loans), internship, and residence (often involving 70-80 hours a week) even to become this surgeon, and that he or she had to flat-out work numerous years more in order to build a viable practice. Nope, they want you to think that these people were hatched or that the system (which they maintained is rigged) somehow made it easy for them....Gee, maybe if they actually tried to accomplish something themselves they'd at least have an appreciation for it.
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It seems to me that you are one of those people who "say that this (1%) individual needs to pay more to the federal government in taxes", or have you now changed your mind?
I'm not sure why med school should cost so much, given that a good
student in physics, biology, chemistry, math, etc can get a PhD with a university provided grant.
These latter, of course survive on
raman noodles an coffee as well, but after their 6-7 years postgrad they are debt free. There are a few
med programs where financial assistance is available-military,
rural care, etc; but IMO, if physicians are in short supply, surely something besides huge debt loans can be tried.
I upped the threshold a while back, Jerry, to $400-500,000 and I'm even willing to accept the Chuck Schumer compromise of a mill.
Don't forget another factor to drain away what some consider to be excessive wages by doctors: malpractice insurance.
From eHow:
"Most doctors pay for liability insurance out of pocket and one policy normally costs tens of thousands of dollars a year, though premiums can be much higher."
Of course, this problem is largely due to the lack of meaningful tort reform, and the fact that there is a massive problem of people filing frivolous lawsuits and winning them. That's a massive "Tax" put their by trial attorneys who revel in their right to lie about people and destroy their careers while getting rich from ill gotten gains.
Then there is this anecdote from answerbag.com:
"My doctor says his would be about $70,000 or so a year, but it used to be $120,000 when he delivered babies"
Well, Will, that $70k frivolous-lawsuit-avoidance-"tax" is one-quarter of the wage of the vascular surgeon you gave as an example.
It's certainly not "mad money in a plutocrat's pocket". If anything is rigged, it is the system where they can be destroyed by a frivilous lawsuit led by an attorney with a good talent for lying. And it is rigged against the doctors.
Income taxes are on net income. Malpractice insurance is a deductible expense, so while a doctor needs to charge enough to pay for it, it is not part of his taxable income.
RE: That's a massive "Tax" put their by trial attorneys who revel in their right to lie about people and destroy their careers while getting rich from ill gotten gains." So, we should up the tax on ambulance-chasing lawyers?
I mispelled "there". Thankful the spelling flamer is ejected from this blog.
You can deduct it, Jerry, but that only lowers your tax burden by $24,500 (35% of the $70,000). And with this particular person in question, that $280,000 is his gross income.
i would think malpractice insurance could be fully deductible
depending on adjusted gross income . Most businesses have
good tax accountants, a goodly number of deductibles (compared to us plain folk) and the medical business is no different. I agree with DMarks that it would be preferable to not be required to
carry malpractice, but I'm thinking
the malpractice insurance companies rather like it.
Yes, it's fully deductible. But when you deduct the $70,000 from the $280,000, you're only netting $24,500....Just for the sake of argument, let's say that all of the earnings are taxed at 35%. 35% of $280,000 is $98,000 and 35% of $210,000 is $73,500, only a $24,500 difference. See what I'm saying?
Right BB. It is a deductible business expense and the good doc is surely set up as a business...and probably a corporation.
Nothing wrong with malpractice insurance as such, but to have it gobble up such a massive part of a doctor's income is a problem.
Hey,John Edwards got rich because of malpractice insurance.Its enabling him the pay child support.
Perfect example of a fellow marrying up (at least in terms of class).
Jerry, and you have a problem with it being deducted as a business expense?...
RN,
Not at all. I believe insurance is a legitimate business expense. In fact, I take advantage of being able to deduct professional liability insurance myself.
Rusty: And frivolous lawsuits are a big part of Edward's riches. As I pointed out before: his claims that OB-Gyns cause genetic birth defects.
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