Among the other things we learned about Obamacare bill after it was passed that there 23 new taxes included within, of which 16 which affect costs to the poor and middle class. One of the more onerous taxes is the medical device tax, which could be construed to cover even tampons. A tax of 2.3% is levied against every single medical device sold in the country. This is not a tax on the profits. This is a tax on the devices and if the company loses 10 million dollars on sales of 50 million, not only do they lose 10 million, but they owe another 1.15 million for the new tax.
Democrats paid lip service to the tax and vowed to kill the tax, until they realized it would just add to the mountainous debt of Obamacare. Subsequently, the tax stays. Of course the company could pass on the extra expenses during a good economy, but we have a terrible economy that Barack Obama continually finds ways to make worse. And when you can’t pass off the increased costs, you suffer from a decrease in profits.
As a result, one large manufacturer of medical devices, Stryker, of Kalamazoo, MI, has announced plans to lay off 1,000 employees. It should also be noted that Stryker began negotiating with China last year to ship their entire operations overseas. GE X-Ray division has already done so. Ironically, the CEO of GE, Jeffrey Immelt works for the Obama administration as it’s “jobs czar”.
The Weekly Standard points out that taxes on drug companies will increase by tens of billions of dollars. But they are in much better shape, since 32 million paying customers will be added as patrons to their business. Drugs for the poor, they have been giving away for free ,for years will now be eligible for government payments for at least the 19 million added to Medicaid. Plus the tax on the drug companies are on profits and not sales.
While we sit back and see another US industry destroyed by the ill conceived policies of the left.