Hundreds of doctors support controversial tax reforms
Lauren Vogel | CMAJ | September 18, 2017
Hundreds of doctors signed an open letter in favor of eliminating certain tax benefits for incorporated physicians
More than 280 doctors from across Canada voiced their support for controversial federal reforms to end certain tax benefits of incorporation for high earners, including many physicians.
Sixty percent of Canadians doctors are incorporated, and under the current rules, they’re able to reduce their taxes by holding investments inside their businesses, diverting income to family members and converting income into capital gains. The federal government is proposing to eliminate these advantages, arguing that many wealthy people are exploiting the rules to avoid paying their fair share of tax.
In an open letter to Finance Minister Bill Morneau, Dr. Mei-Ling Wiedmeyer and other doctors argued the reforms are a “first step” toward a fairer tax system.
“We need a comprehensive tax policy review, including the processes that benefit the wealthiest Canadians,” said Wiedmeyer, a Vancouver family physician, in a press release. “Even as a physician with a fee-for-service practice where I contribute to overhead, and with children for whom I’ve taken maternity leave, I still think our tax dollars need to equitably go towards funding areas such as childcare programs and Indigenous health.”
In their letter, the doctors acknowledged that “some physicians have argued that these tax mechanisms are provided in lieu of benefits or to compensate for high student debt and long training periods.” Concerns about increasing rates of burnout and inequities between physician payment models are also driving opposition.
However, “even with these constraints, the vast majority of physicians remain among the top 1-5% of income earners in Canada,” they said.
The letter’s signatories also highlighted the need for adequate tax revenues to fund social programs, including health care. “These programs directly impact the health of our patients, and we believe it is important for us to contribute to their sustainability through an adequate tax base,” they argued. Ultimately, “solutions do not lie in maintaining existing tax benefits for the medical profession.”
Even among doctors, the benefits aren’t distributed evenly, they added. While “certain incorporated doctors with specific family structures” cash in, others miss out, including “single-parent physicians, those with young children, and those who cannot incorporate at all.”
“As an incorporated physician, I feel issues such as physician remuneration models, access to parental leave and medical student debt should not be addressed through tax mechanisms not equitably available to all physicians,” stated Dr. Hasan Sheikh, an Ontario emergency physician who signed the letter.
Because some incorporated physicians may face substantial financial challenges due to the reforms, the doctors are calling on the federal government to create a clear transition plan for those most impacted. They also urged federal and provincial governments to cooperate on lowering medical student tuition, implementing debt forgiveness programs, and extending access to health benefits, parental leave, and pension plans for all Canadians.
Photo credit: psisa/iStock
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