No. of Recommendations: 2
"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.

Print the post  


Live Video Event Monday!
The GP team is hosting a live video event on Monday at 4 p.m. ET. Don't worry if you can't make it — we'll have a replay and a transcript. Click for more!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.