Tuesday, December 11

2.3 Percent Tax on Medical Devices To Kill Thousands of US Jobs

Keep in mind that the US Government's definition of 'Medical Devices' that will be subject to a 2.3% tax on gross sales includes even such generic items such as rubber gloves. Even better, the tax applies to products that are are also used in veterinary medicine.

So vet visits are probably going to go up as well. And since this is a gross sales tax, regardless of profit or loss, it seems that some medical manufactures are thinking twice about having their manufacturing in the US:
According to the Treasury Department, the medical device companies actually stand to benefit from the law. Though the 2.3 percent tax hits the industry, the department argues that the millions of new health care customers insured as a result of the law will increase the demand in hospitals to order more equipment -- in turn boosting medical device companies' profits.

That’s not how the industry sees it. Stephen J. Ubl, president of the Advanced Medical Technology Association, said this week in response to the IRS rules that the tax could cost thousands of jobs – and is already causing companies to lay off workers and cut back on research and development.

“While Washington talks about a fiscal cliff, this tax could push us off an innovation cliff, costing as many as 43,000 jobs and hurting the ability of medical technology companies to find tomorrow’s treatments and cures. It should be repealed,” he said. - Fox News
Sure, you can say that it is only 2.3 percent, but this is out of a maximum of 100%, any more and the business involved is operating at a loss. Out of that 100% revenue total needs to come all of the expenses of the business from raw materials, salaries, manufacturing, research and so on. And lets not forget that if you manage to make a profit, you need to pay taxed before passing those profits to the shareholders, who then pay taxes on this same profit again.

As I have said before, President Obama and the Democrats hate your job. This is just one more example where they are doing nothing to protect these jobs or the industry as a whole, which I would dare say is probably a global powerhouse of development and innovation and at the end of the day a source of massive amounts of tax revenue both directly from the corporations as well as from those who back these companies and eventually profit from them.

Update: 11 Dec 12
 Surprise! Senate Democrats are calling for a delay in implementing this job-killing tax:
In a letter to Majority Leader Harry Reid, 18 Democrat senators and senators-elect have asked for “a delay in the implementation” of the Obamacare medical device tax. Like most of the significant tax increases in Obamacare, the medical device tax is scheduled to take effect on Jan. 1, 2013, conveniently after the 2012 presidential election.

Each of the 18 Democrat signatories voted for or supported Obamacare in the first place. And now they want a sweetheart exemption from one of its most onerous provisions. Even in Washington DC, that shows a lot of gall. - ATR.Org (Click to read the list of Democrat Senators signing the letter)
There is one way to delay the tax, delay ObamaCare!
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