8 ms·

That doctor is spending real money on attending medical school, which pays professors. It is an equivalent.

Retric 6y ago
Yes, the Doctor likely makes to much to even deduct the interest on student loans from their taxes where a company could in effect deduct both the interest and principal from those student loans as an expense. Deducting every cost associated with a job would be a huge tax benefit that simply doesn’t apply to people. It’s one of the ways that referring to tax burdens based on income as defined by the tax code is misleading.
- smaryjerry 6y ago
  First of all you can deduct interest but the standard tax deduction already given usually accommodates a lot of that deduction. Companies can’t deduct principal payments either. There is a crazy amount of people including this article that have no concept of what taxes are. Taxes are not on gross income they are on profit. Calculating taxes on gross income, as this article says, would be outrageous. Take this articles reference that a deduction on stock paid to employees should not be given. The employees who receive that stock have to pay taxes on that money so if it was taxed it would then be essentially double taxed. Also this article states that accelerated depreciation does not encourage investment, and that is just bollocks. Anyone who works in finance would know that accelerated depreciation allows better cash flow on your investment and can make a project feasible or not feasible.
  - Retric 6y ago
    > Companies can’t deduct principal payments either. The initial cost would be tax deductible and could rollover across multiple years, therefore in effect the principle is deductible even if the specific payments aren’t. The way the deduction actually works is actually better than simply deducting principle payments from the loan due to time value of money. The issue with accelerated depreciation is it’s a subsidy. The government is paying interest on it’s debt so companies can defer tax payments, that’s directly costing actual taxpayers money. Further, communism has already been tried and it’s a bad idea, we really don’t want central planning as part of the tax code because it’s a bad idea. Subsides for industry X over industry Y has all the same issues.
    - smaryjerry 6y ago
      Principle is not at all “in effect deductible” in the slightest. If you spent money on expenses that is deductible whether you borrowed that money or not and has absolutely nothing to do with principal. On the second point accelerated depreciation is NOT a subsidy in the slightest either and not at all related to government debt. Depreciation is already a delayed acknowledgment of expenses. Without depreciation someone would deduct the entire amount of a cost immediately and pay much lower taxes. Accelerated depreciation costs taxpayers nothing. The government is not funding anything, the government is collecting less tax up front but more over time. Whether the government has liabilities is irrelevant. I don’t understand the point you are making on communism or how that relates at all unless you assume all tax collected is communist.
      - Retric 6y ago
        > Depreciation is already a delayed acknowledgment of expenses. Without depreciation someone would deduct the entire amount of a cost immediately and pay much lower taxes. No, if a company buys say land they can’t deduct anything because land retains value until the point of sale. The same is true buying stock or other items that maintain value over time. The general rule is something is a deductible expense at the point of destruction or sale not purchase. Depreciation is therefore an acceleration of that process. Companies for example used printing presses for a hundred years meanwhile during much of that time the actual value increased above it’s purchase price due to inflation. It’s surprisingly common for companies to sell something for a profit that they have already fully deprecated. > I don’t understand the point you are making on communism All specific tax exemptions for business are communist in nature because they replace market forces with government choices. It’s very obvious in the case of farm subsidies for example, but it’s a generalizable rule that government subsidies reduce market efficiency by incentivizing inefficiency.
        smaryjerry 6y ago
        Your comment again makes no sense. Land is NOT depreciable and neither is stock. Depreciation is not an exemption of taxes. You must realize that selling something that has been depreciated results in you selling it for a profit and thus is taxable. Depreciation reduces the cost basis. I’m not sure if at this point you are trolling by your comments always saying the opposite of the actual tax laws.
Schiendelman 6y ago
The medical school is the equivalent, which likely deducts the salary of the professors (if it’s private). Most private schools also pay no taxes.
- deleted 6y ago
  [deleted]
andruby 6y ago
Can you deduct the interest paid on student loans in subsequent years? I think this is possible in some countries (iirc Belgium always deducting certain interest payments for personal taxes)
- bradleyjg 6y ago
  There’s a low cap ($2500) on the amount of interest that can be deducted and if the tax payers income gets too high ($85k for a single filer) you can’t deduct anything.
  - dont__panic 6y ago
    Not to mention that unless you're taking losses from other investments or doing fairly complicated things with your income, the standard deduction is likely high enough that you don't benefit at all from student loan interest deductions. So other people without interest get the same deduction as you anyway.
    - bradleyjg 6y ago
      That’s the one bright spot, student loan interest is above the line (i.e. can be taken in addition to the std deduction). But the other limitation are very low.
rs999gti 6y ago
Also, if the doctor goes into private practice, they will live with significant loses until the practice is established: Expenses such as: 1. Rent 2. Marketing 3. Equipment 4. Student loans 5. Malpractice insurance 6. Billing service, unless they want to do this themselves 7. Staff All these expenses can be written off until the business is established and profitable.

Yes, the Doctor likely makes to much to even deduct the interest on student loans from their taxes where a company could in effect deduct both the interest and principal from those student loans as an expense. Deducting every cost associated with a job would be a huge tax benefit that simply doesn’t apply to people. It’s one of the ways that referring to tax burdens based on income as defined by the tax code is misleading.

smaryjerry 6y ago
First of all you can deduct interest but the standard tax deduction already given usually accommodates a lot of that deduction. Companies can’t deduct principal payments either. There is a crazy amount of people including this article that have no concept of what taxes are. Taxes are not on gross income they are on profit. Calculating taxes on gross income, as this article says, would be outrageous. Take this articles reference that a deduction on stock paid to employees should not be given. The employees who receive that stock have to pay taxes on that money so if it was taxed it would then be essentially double taxed. Also this article states that accelerated depreciation does not encourage investment, and that is just bollocks. Anyone who works in finance would know that accelerated depreciation allows better cash flow on your investment and can make a project feasible or not feasible.
- Retric 6y ago
  > Companies can’t deduct principal payments either. The initial cost would be tax deductible and could rollover across multiple years, therefore in effect the principle is deductible even if the specific payments aren’t. The way the deduction actually works is actually better than simply deducting principle payments from the loan due to time value of money. The issue with accelerated depreciation is it’s a subsidy. The government is paying interest on it’s debt so companies can defer tax payments, that’s directly costing actual taxpayers money. Further, communism has already been tried and it’s a bad idea, we really don’t want central planning as part of the tax code because it’s a bad idea. Subsides for industry X over industry Y has all the same issues.
  - smaryjerry 6y ago
    Principle is not at all “in effect deductible” in the slightest. If you spent money on expenses that is deductible whether you borrowed that money or not and has absolutely nothing to do with principal. On the second point accelerated depreciation is NOT a subsidy in the slightest either and not at all related to government debt. Depreciation is already a delayed acknowledgment of expenses. Without depreciation someone would deduct the entire amount of a cost immediately and pay much lower taxes. Accelerated depreciation costs taxpayers nothing. The government is not funding anything, the government is collecting less tax up front but more over time. Whether the government has liabilities is irrelevant. I don’t understand the point you are making on communism or how that relates at all unless you assume all tax collected is communist.
    - Retric 6y ago
      > Depreciation is already a delayed acknowledgment of expenses. Without depreciation someone would deduct the entire amount of a cost immediately and pay much lower taxes. No, if a company buys say land they can’t deduct anything because land retains value until the point of sale. The same is true buying stock or other items that maintain value over time. The general rule is something is a deductible expense at the point of destruction or sale not purchase. Depreciation is therefore an acceleration of that process. Companies for example used printing presses for a hundred years meanwhile during much of that time the actual value increased above it’s purchase price due to inflation. It’s surprisingly common for companies to sell something for a profit that they have already fully deprecated. > I don’t understand the point you are making on communism All specific tax exemptions for business are communist in nature because they replace market forces with government choices. It’s very obvious in the case of farm subsidies for example, but it’s a generalizable rule that government subsidies reduce market efficiency by incentivizing inefficiency.
      - smaryjerry 6y ago
        Your comment again makes no sense. Land is NOT depreciable and neither is stock. Depreciation is not an exemption of taxes. You must realize that selling something that has been depreciated results in you selling it for a profit and thus is taxable. Depreciation reduces the cost basis. I’m not sure if at this point you are trolling by your comments always saying the opposite of the actual tax laws.

Schiendelman 6y ago

The medical school is the equivalent, which likely deducts the salary of the professors (if it’s private). Most private schools also pay no taxes.

deleted 6y ago
[deleted]

andruby 6y ago

Can you deduct the interest paid on student loans in subsequent years? I think this is possible in some countries (iirc Belgium always deducting certain interest payments for personal taxes)

bradleyjg 6y ago
There’s a low cap ($2500) on the amount of interest that can be deducted and if the tax payers income gets too high ($85k for a single filer) you can’t deduct anything.
- dont__panic 6y ago
  Not to mention that unless you're taking losses from other investments or doing fairly complicated things with your income, the standard deduction is likely high enough that you don't benefit at all from student loan interest deductions. So other people without interest get the same deduction as you anyway.
  - bradleyjg 6y ago
    That’s the one bright spot, student loan interest is above the line (i.e. can be taken in addition to the std deduction). But the other limitation are very low.

rs999gti 6y ago

Also, if the doctor goes into private practice, they will live with significant loses until the practice is established: Expenses such as: 1. Rent 2. Marketing 3. Equipment 4. Student loans 5. Malpractice insurance 6. Billing service, unless they want to do this themselves 7. Staff All these expenses can be written off until the business is established and profitable.