Aren't you disgusted when you look at your gross income vs net income?

yagtash

RE: Aren't you disgusted when you look at your gross income vs net income? 3/12/2012 9:09AM - in reply to ryan foreman

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ryan foreman wrote:

Well, You are showing you don't really know how the tax system works in practice or the whole economy in general. Nor how it used to work. Over 40 years ago the economy and tax system highly rewarded people developing skills and a doctor paid relatively little in taxes. Even when the top tax bracket reached 90%. High wealth people really did pay a higher tax rate than doctors. Today, the tax system and economy is skewed toward rewarding wealth and business owners who create "ideas" and economies scale using ultra cheap foreign labor. Senior corporate executives have tax benefits they can take advantage of that doctors do not. That is just reality.

Yes, I know about capital gains and corporate compensation strategies which lower the tax burden of high ranking employees. Among people who aren't being compensated in this way, this practice is almost universally seen as taking advantage of an unfair loophole. It is in the process of being closed (see "Buffett Rule"). The fact that the executive class is getting away with an unfair practice doesn't mean that wealthy people fairly paying their taxes are suddenly enslaved by the Na*zi IRS regime out to punish people for working hard. It just means that these rich but not uber-rich people aren't cheating the way some uber-rich do by evading income tax.

If there were some box on your tax return in the good old days 40+ years ago that said "are you a doctor?" which immediately lowered your tax burden by half, then yes, that would be an unfair advantage for wealthy individuals in the exact same way that corporate income tax evasion is unfair. You can't say its only fair to evade taxes if you're a doctor but unfair if you're an exec (this goes back to "stick to your guns" yet again).

Coincidentally, every time the marginal income tax rates exceeded 70%, this only applied to income earned above $1.5M adjusted for inflation, not the theoretical $300k we've been discussing. See wiki entry for income tax in US.

My own dad was a doctor who started practicing in the early 70s. I didn't go into any kind of medical job but I went into accounting so I know the financial and tax side of it and I know about my Dad's work and the people who came up after him in his practice. This is an argument you can't really win.

Then outright say what the tax benefit was of being a doctor and why that tax benefit was fair compared to corporate capital gains taxes of today.

You may be right about the number people still going into medicine. Most of the people have a passion for it first and foremost aside from any financial considerations. Plus, it is just about the most secure job there is. In this economy that goes a long way.

man, starting to sound like docs have it good...

But I also know that doctors today are not working the long hours like my dad used to. They don't say its specifically because the taxes but when their marginal tax rates are upwards of 40% that has to be a factor. Its like you are being treated like a pack of cigarettes when you are taxed that high and other wealthier and poorer people are taxed less. The tax system is telling you we don't want you to do this. And I do know of people today who have gone through medical school and didn't pursue being a doctor. Besides that, demand has gone through the roof. Even with people coming into the field I'm doubtful its keeping up.

Huh? Doctors aren't working the same hours as your dad because of their marginal tax rate?

1) Are doctors paid by the hour to begin with? I'm no doctor, but I thought hourly wages were reserved for labor jobs, and maybe contractors at best. If MDs are paid hourly, then I take it back.

2) Your cigarette analogy is again backwards and is an unfair reverse personification (if there is such a thing). Unless I'm wrong, a doctor making $300k and anyone else making $300k in INCOME (not investment benefits as we discussed above) pays the same amount in income tax. This is not like the cigarette tax at all. The cigarette tax analogy would only apply if there was a special EXTRA tax of 50% if you have an MD, and again, I'm not aware of thist, but I invite you to prove otherwise. Note: I'm not talking about malpractice insurance costs, that's a whole other thread entirely not related to income tax.

3) You know people who went to med school but didn't become doctors? I hope you aren't trying to say they decided not to become doctors because of marginal income tax rates. That would just be a terrible idea on your part. Unless they instead decided to be executives in order to earn even more and simultaneously evade income tax, but people don't really just "decide" to be executives.

But hey, my viewpoints indicate that I'm a "young person" so I don't know anything about the world.

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