I would like to suggest a different reason for the medical crisis that is being legislated in our capital. I would like to suggest it is really a tax crisis instead.

Why? Because physicians reach a threshold of taxation so quickly that their incentive to work any additional hours becomes severely diminished. Diminished hours means diminished supply. So why are we not doing all we can to increase supply if we have a shortage of services?

Like any hardworking individual, doctors know when they reach a point of diminishing return on what they are selling. And they are selling something-knowledge. How many days do you think a doctor has to work in order to hit the maximum tax brackets, and thus suffer the maximum amount of deterrence to work harder? If by April 15th of every year you knew that most of your earnings were going to taxes, how motivated would you be?

I have heard lots of stories about how expensive treatments are for one lifesaving procedure or another. Yet I never hear someone say that the $100,000 spent to save their lives really was not worth it. Yet physicians are not competing with one another for that business are they? They are not extending their office hours, open Saturdays and Sundays to reduce their backlog of patients, or any of the other ways that they could see more patients and effectively, earn more income. Why do you think that is?

If just 50% of physicians had an incentive to treat 10% more in terms of patients, would we really need to have government take over health care in our country?

Our tax structure is meant to punish those that earn the most in our society. If we are punishing them via the tax code, why would they turn around and work harder? Why would they try to increase their incomes by seeing more patients and then finding that for every dollar they earn, they are paying 65 cents or more in taxes. After you reach the 50% tax bracket, you are working more for the government than you are for yourself anyway. How many rational people would knowingly work harder and harder for less? It's just not worth it.

And today, many of us have been pushed into punitive tax brackets without earning incredible sums of money, due to the broken tax code. How many of us have been struck by reduced deductions, or the aleternative minimum tax? These are punitive by design. The government knows it and have refused to eliminate them.

So, imagine the federal, state and local taxes a successful doctor must pay once he has made, for arguments sake, $400,000 in income for the year. He could work 10% harder to earn $40,000 more, but he will only pocket $10,000 or so after the additional taxes, reduction in value of his itemized deductions, and possibly the alternative minimum tax. Where is the incentive? There is none.

As I have suggested in the past, if the politicians were serious about increasing the supply of medical services in the United States, they would immediately eliminate all federal income taxes in the medical field. Give those working in the business today the incentive to work more. What they are doing today will give them greater incentive to work less. It will not be worth the pay or the paperwork.

Eliminating the Federal Income tax on the medical profession would be good for their pocketbooks, and for ours. They only losers would be the politicians who would not have the money pass through their hands, and who do not get to control our lives.

This is a tax crisis at heart. The reason this “crisis” hits us the way it does while there are so many other professions that also suffer from high punitive taxes is that medical care is a personal need. High paid movie stars, sports players, investment bankers, and others are optional in the majority of our lives. Medical care is not. And this crisis is being exploited for too many reasons to list here.

Fix the punitive tax code in this nation, and we would have all the medical care we needed. That is the way capitalism works. Unfortunately there are too many in Washington creating a tax code with no understanding or belief in a capitalist America.