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Author: Knighted Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 745941  
Subject: The Medical Device Tax impact Date: 11/17/2012 2:13 PM
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As a result of the Obamacare legislation, medical device companies will have a 2.3% tax imposed on their sales, regardless of whether any profit or income is made. Skimming through recent news articles, what has the jobs impact been so far?

Here are the companies that have reported significant layoffs as a result of this tax:

1200 jobs - Boston Scientific
1000 jobs - Medtronic
1170 jobs - Stryker Medical
770 jobs - Smith & Nephew
700 jobs - Abbott Labs
595 jobs - Covidien
500 jobs - St. Judge Medical
427 jobs - Kinetic Concepts
275 jobs - Welch Allen
250 jobs - Westchester Medical
200 jobs - Hill Rom
105 jobs - Liberty Medical

That's 7,192 high paying jobs lost so far simply as a result of the medical device tax in the healthcare bill. Numerous other companies have hinted at layoffs, have cancelled plans that were in the works to create new manufacturing facilities in the US, and have reduced hours. Of course, the left tells us that raising taxes doesn't affect behavior and may even be good for the economy, so all of these companies must simply be dirty rotten lying Capitalist pigs paid off by Romney to create bad publicity for Mr. O.
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Author: ResNullius Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 655711 of 745941
Subject: Re: The Medical Device Tax impact Date: 11/17/2012 4:15 PM
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I don't really buy the argument that these medical device companies are laying off people because of this tax. It makes no sense, since their customers don't pay for the devices or the tax--insurance pays for it. I think Obama's increased taxes aren't good for the economy, but I don't think the medical device tax is the reason for these announced layoffs.

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Author: fleg9bo Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 655713 of 745941
Subject: Re: The Medical Device Tax impact Date: 11/17/2012 4:28 PM
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I don't really buy the argument that these medical device companies are laying off people because of this tax. It makes no sense, since their customers don't pay for the devices or the tax--insurance pays for it.

But this tax is huge. And it's 2.3% of sales, not profit.

http://americanactionforum.org/topic/medical-device-excise-t...

The effect of the tax on earnings of U.S. companies is likely to be significant. In 2006, medical device manufacturers reported taxable income of $13.7 billion and paid $3.1 billion in corporate taxes. The United States already has one of the highest corporate income taxes in the world. The new 2.3% excise tax will roughly double their total tax bill and raise the average effective corporate tax rate to one of the highest effective tax rates faced by any industry in the world.
___________________

Sounds like a great way to bend the cost curve down, doesn't it? And with the device makers unable to pass the increased cost along to the consumer, there isn't much else they can do but try to lower expenses, including eliminating employees.

--fleg

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Author: telegraph Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 664339 of 745941
Subject: Re: The Medical Device Tax impact Date: 1/5/2013 10:23 AM
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"I don't really buy the argument that these medical device companies are laying off people because of this tax. It makes no sense, since their customers don't pay for the devices or the tax--insurance pays for it. I think Obama's increased taxes aren't good for the economy, but I don't think the medical device tax is the reason for these announced layoffs. "


Of course it is


It's a 2.5% 'gross receipts' tax. If your profit margin is 10%, it's a 25% tax on profits. That's a big bite.

And,that of course, assumes you have profits. If you are a start up,not even making a profit, you still pay 2.5% of your 'gross'. If you are a small growing company, trying to re-invest your profits to grow your business....well, sorry, you are out of luck. Uncle Sam grabs 25% of that.

Worse, the gov't won't pay any more for those medical devices. It wants to pay even less, so you can't raise your prices.

All this will do is move production overseas. Move research overseas. And have less money for research and development of better and cheaper solutions to problems. You'll 'freeze' the technology at today's level.

It's a 25% grab of 'profits' to provide for the welfare weenies and queenies.



t.

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Author: JoshRandall Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 664350 of 745941
Subject: Re: The Medical Device Tax impact Date: 1/5/2013 10:49 AM
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t, one of the few atheists who make some sense.

rec

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