What Bush tax cut plan could mean to physicians

You'll likely pay less income tax, but the proposed repeal of the estate tax is uncertain.

By Julie A. Jacob, AMNews staff. March 26, 2001.

If President Bush's tax cut, which was passed by the U.S. House of Representatives in March, also passes the U.S. Senate, physicians will save thousands of dollars on their income tax within five years and also may get relief on estate taxes, potentially making it easier to pass down a practice to the next generation.

Organized medicine itself has not been active in lobbying for or against Bush's plan. An American Medical Association spokesman said the organization is neutral on the plan. But many physicians are watching with interest.

Bryan Pechous, MD, an ophthalmologist in Dubuque, Iowa, favors Bush's tax plan. As a self-employed physician running a professional corporation, Dr. Pechous said he is taxed at a higher rate than large corporations. Plus, he said, his income level reduces many of his deductions.

"Any relief would be beneficial to myself and many other self-employed individuals, physicians and nonphysicians alike," Dr. Pechous said.

Brian Greenberg, MD, a pediatrician in Tarzana, Calif., isn't so supportive. "Before we go about giving back huge amounts of money, we should make sure we are running a balanced budget, that the amount of money given back is accounted for and that we have money for government programs and set aside for a rainy day," he said.

It's still too early to predict just what sort of tax cut will ultimately emerge from Congress, tax experts say. In particular, experts wonder if Bush's plan to repeal the estate tax will end up passing Congress. It wasn't included in the House bill. [...]