America's Doctors—You Deserve a Break

Physician's Money Digest, September30 2004, Volume 11, Issue 18

When I broached the subjectof income taxes withmy father, he replied,"Well, Gregory, you justhave to pay them." Although I'm surehe didn't always like doing it, I know offew people who can deliver bad news asably as my dad. Those are the facts, butare they fair? That's the debate.

I'm sure it won't surprise my doctor-readers—and it will gratify many—tolearn that I strongly support PresidentGeorge W. Bush on his tax polices. Thepresident has already cut federal incometaxes twice and is currently fighting tosee that those cuts become a permanentpart of the nation's fiscal law (many provisionsare due to lapse before 2010).

Doc's Due

The facts show that now more thanever, hard-working physicians deservetheir bounty. They've earned it. As the sonand grandson of physicians, and in mynumerous dealings with our readers, I'vecome to learn that most medical professionals—while flawed like all of us—possessa genuine concern for their patientsand reverence for their profession.

America's doctors realize that theirjob involves a sacred trust and thatpatients come before profits. But thegame has been moved on them. There'sno question that the medical professionhas changed—and sadly not for the better.Few doctors now believe that thepractice of medicine is not a business. Ifthey don't, they'd better. And making ago of that business for all too many isbecoming increasingly tedious and economicallyunrewarding.

The profession's economics are unevenat best. Two separate physicianincome surveys in 2004, one by theMedical Group Management Associationand the other by the AmericanMedical Group Association, show thatover the past 4 to 5 years, primary caredoctors have been compensated at arate that fails to beat inflation—averaginga very feeble 1.9% annual increasein pay. This is for a group that helpsother human beings—a very skilledlabor. What union in America wouldaccept that pay rate for its members?

Paying up

According to the nonpartisan TaxFoundation (202-464-6200; www.taxfoundation.org), about 40% of Americanspay no federal income taxes at all(silly me, I subscribe to the notion thatonly if you pay taxes are you entitled toa cut). The numbers further show that,based on Congressional Budget Officedata on the remaining 60%, the topearning20% of the country—mostlydual-income couples and business owners,which includes most of our readers—pay "the lion's share."

Physician's Money Digest

America's doctors certainly qualifyon the level. In 2001 (the latest date forwhich there are complete figures), ifyour adjusted gross income (AGI)topped $128,000 (ie, almost 75% ofreaders),you're in the nation's top 5% of taxpayers.This group paid about 53% ofall federal income taxes. With an AGIof about $93,000 (95% of readers), youmake the top 10%, which paid nearly65% of the nation's income tax bill.

I must concede to my readers thatthe president and Congress can andmust do a much better job of controllingfederal spending and ensuring thatwhat is spent is done so judiciously. Insummary, I wouldn't mind paying incometaxes at all if I thought that thegovernment was spending our moneywisely. But by my standards, it's not.