Thursday, January 6, 2011

IRS vs. Medical Residents

In November, the Supreme Court essentially said that the IRS can categorize medical residents similarly to apprentice tradespeople or law clerks, due to an overall reluctance to overturn an arbitrary rule that medical residents must pay Social Security taxes.

But medical residents are students. They get paid a pittance so that they can survive while going to school. That pittance is essentially compensation for the egregious number of hours that the teaching hospital requires them to put in while receiving training for their job. states that in exchange for a list of required tasks to complete at the hospital (remember, 80 hours a week in 16 hour shifts) most residents make approximately $35,000 a year with increases of about $1500 a year until completion or fellowship.

A side note: where did Justice Sotamayor get the $50,000 a year figure? Most sources I have checked say anywhere from $35-40 K a year for most residents at most teaching hospitals.

In most areas of the country, that is barely enough to survive. Throw in the fact that the laws regarding loan repayments have recently changed, and thus the number of students that qualify for deferments/forbearance/grace from their creditors has gone down, and you have some desperately poor medical residents.

You want to tax doctors? Fine, do just that. I think that the rich should have to pay more in taxes anyway, because they can afford to. But while residents may have their MD, they are not full-fledged doctors yet, and thus aren't making that six figure salary. We are facing a critical shortage of doctors in this country, and the federal government certainly isn't making life any easier for the people that are trying to get out there and help the sick and the ailing.

I do sympathize with the idea that Social Security taxes are a big source of revenue. I get that. But right now the rules are exceptionally arbitrary. We need to ease up on residents and clearly define the difference between people who work to get to school and educate themselves and people who work to support themselves.

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