Is there a maximum marginal rate beyond which would curtail working as a doc?

[VagabondMD]

A physician friend (and troublemaker) on FB posted an article describing Elizabeth Warren’s proposed plan to increase social security benefits to the needy and increase the tax on the wealthy. To wit, to generate additional revenue, she would reinstitute the payroll tax at 14.8%, above $250k.

It did not take all of my fingers and toes to realize that I would get to keep 40 cents of my last dollar earned and that I would have no interest in working to earn above $250k under those circumstances. Likely, others in the professional class might feel the same, while many do not have a choice and many more will work to earn as much as possible no matter the taxation regime.

So do you have a “number”, and what is it?

https://www.cnn.com/2019/09/12/politics/elizabeth-warren-social-security-expansion-plan/index.html

[Peds]

If I can generate a million....I would do it.

[Crazyroadtodublin]

The issue is that she wants to burn the candle at both ends....Wealth tax on the high end payroll on the other end.  (How's that for trouble

[benign_user]

You can make an s-Corp and pay less payroll taxes.

[nephron]

That is a very high tax rate she is proposing.   I probably would look to cut back at the 60-70% tax rate, maybe take close more clinic days, take more days off.   The problem with taxes is that your overhead would remain largely fixed though, the staff still needs to be paid, rent still needs to get paid, etc, and if you cut back substantially, your fixed expenses would be eating up a larger proportion of your salary.    I really hope that she does not get elected, I wish that there were a candidate proposing a 14% increase in payroll taxes to decrease the deficit and begin to pay down the debt rather then a 14% increase in payroll taxes to create more entitlements for people.

[wa2106]

Currently no but I'm early in career and need money.  Imagine answer would be different when I'm FI.

I think older physicians should head for the door now in preparation for this atrocity.

[CordMcNally]

nephron wrote:

I really hope that she does not get elected, I wish that there were a candidate proposing a 14% increase in payroll taxes to decrease the deficit and begin to pay down the debt rather then a 14% increase in payroll taxes to create more entitlements for people.

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If you're looking for common sense actions, you shouldn't be looking towards the government.

[CordMcNally]

I'm sure I have a number but I'm not sure what exactly it is. I'm young and hungry so the tax rate would have to be pretty high. I will say, that number does get lower and lower for me each year.

[MPMD]

I really wish we would get to a point as a forum where we spent as much time worrying about actual, current financial policy as we do about early primary proposals. I'm not holding my breath on this.

[VagabondMD]

MPMD wrote:

I really wish we would get to a point as a forum where we spent as much time worrying about actual, current financial policy as we do about early primary proposals. I’m not holding my breath on this.

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The proposal got me thinking about this question, and this post is not about the proposal, per se. The discussion can be launched without the article and the proposal, and I considered not linking to the article.

It really is about if/where you would draw the line. For some people, it might be choosing not to work in a state with a state income tax (though they often get you somewhere else) or perhaps working up to a bracket cutoff that is already in place (perhaps the 24/32 cutoff).

[artemis]

That would probably be just the push I’d need to retire from medicine (or to go to part-time, if I could work such an arrangement out with my group).  At this point in my career, I’m only working for the money; if it goes, I go.  If I decided later that I could use a little more spending money in retirement, I’ve already mastered saying “Would you like fries with that?”.

[FIREshrink]

I'm currently at 32%. Not self employed and no state tax. So I could take a bit of a hit and still be a team player. Above 45% I'm probably losing interest though and being FI might go hiking instead. I realize many are already paying this.

[Lordosis]

Yeah us young guys do not have much of a choice.  Better 50 cents on the dollar then nothing.  However it does make you think about working harder then you want to just fro money.  I have "opportunities" all the time to fill in at our urgent care.  I do occasionally when they get desperate and offer extra on top of usual pay.  Knowing that a larger chunk is going to taxes for money I really do not need I might keep my Friday night.

[DDSonFIRE]

Lately I earn enough by about June to be in the highest Tax bracket. It is a little depressing to think that the entire second half of the year I'm only earning about 50 cents on the dollar (with state tax included). For me though I have a goal to retire early with a set target amount, and 0 cents on the dollar will just delay that.

I think in the 1970s the top Tax bracket was 70%... ouch

[VagabondMD]

Lordosis wrote:

Yeah us young guys do not have much of a choice.  Better 50 cents on the dollar then nothing.  However it does make you think about working harder then you want to just fro money.  I have “opportunities” all the time to fill in at our urgent care.  I do occasionally when they get desperate and offer extra on top of usual pay.  Knowing that a larger chunk is going to taxes for money I really do not need I might keep my Friday night.

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That’s sort of the point, too. Why burn yourself out keeping 40-50% when could perhaps work longer and less up front and retain more of your earnings over time? This assumes that you have the ability to crank your work/compensation level up/down