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A year from now, the federal government will start collecting a new tax on medical devices from tongue depressors to imaging machines, thanks to the sweeping health-care overhaul that Democrats enacted in the spring of 2010. People in the industry say it’s already having an effect.
In November, citing the new tax, Stryker Corp. (SYK), whose products include artificial hips and knees, announced that it would let go about 1,000 of its workers. Earlier last year, Covidien Plc (COV), maker of surgical instruments, said it would lay off 200 workers in the U.S. and move production to Costa Rica and Mexico. It, too, cited the tax.
Other companies in the field have announced similar measures -- or plans to expand production overseas but not in the U.S. -- without mentioning the tax. The sluggish economy is clearly part of the explanation, but the medical-devices industry had been a relative bright spot within U.S. manufacturing, losing only 1.1 percent of its employees during 2007-2008 while manufacturing as a whole lost 4.8 percent. A study done for AdvaMed, a trade association for the industry, claims the tax could ultimately cost more than 45,000 jobs.
Medical-device companies employ more than 400,000 Americans. Their wages are higher than the national average. The U.S. is a net exporter of medical devices.
The tax will change these numbers for the worse. It will be levied at 2.3 percent of sales; on average, profits make up less than 4 percent of sales in the industry. The AdvaMed study concludes, “The new 2.3 percent excise tax will roughly double their total tax bill and raise the average effective corporate income tax rate to one of the highest effective tax rates faced by any industry in the world.”
A year from now, the federal government will start collecting a new tax on medical devices from tongue depressors to imaging machines, thanks to the sweeping health-care overhaul that Democrats enacted in the spring of 2010.
The new 2.3 percent excise tax will roughly double their total tax bill and raise the average effective corporate income tax rate to one of the highest effective tax rates faced by any industry in the world.
If I were a petty person I would say I told you.
Who am I kidding?
I told you!
A year from now, the federal government will start collecting a new tax on medical devices from tongue depressors to imaging machines, thanks to the sweeping health-care overhaul that Democrats enacted in the spring of 2010. People in the industry say its already having an effect.
In November, citing the new tax, Stryker Corp. (SYK), whose products include artificial hips and knees, announced that it would let go about 1,000 of its workers. Earlier last year, Covidien Plc (COV), maker of surgical instruments, said it would lay off 200 workers in the U.S. and move production to Costa Rica and Mexico. It, too, cited the tax.
Other companies in the field have announced similar measures -- or plans to expand production overseas but not in the U.S. -- without mentioning the tax. The sluggish economy is clearly part of the explanation, but the medical-devices industry had been a relative bright spot within U.S. manufacturing, losing only 1.1 percent of its employees during 2007-2008 while manufacturing as a whole lost 4.8 percent. A study done for AdvaMed, a trade association for the industry, claims the tax could ultimately cost more than 45,000 jobs.
Medical-device companies employ more than 400,000 Americans. Their wages are higher than the national average. The U.S. is a net exporter of medical devices.
The tax will change these numbers for the worse. It will be levied at 2.3 percent of sales; on average, profits make up less than 4 percent of sales in the industry. The AdvaMed study concludes, The new 2.3 percent excise tax will roughly double their total tax bill and raise the average effective corporate income tax rate to one of the highest effective tax rates faced by any industry in the world.
Tongue-Depressor Tax Will Harm Jobs, Innovation: Ramesh Ponnuru - Bloomberg
I don't think anyone credibly disputes that, all else equal, taxing an industry hurts it.
That being said, this is an editorial by an editor for the National Review, citing numbers from an industry advocacy group. It deliberately presents a very one-sided view of the tax.
I don't think anyone credibly disputes that, all else equal, taxing an industry hurts it.
That being said, this is an editorial by an editor for the National Review, citing numbers from an industry advocacy group. It deliberately presents a very one-sided view of the tax.
If anything, it's the tidal wave of Pub BS fear mongering about Health Reform...Pub Dupes!
If anything, it's the tidal wave of Pub BS fear mongering about Health Reform...Pub Dupes!
prove those companies lied about their cutting jobs because of Obamacare, dick-spittle. Go ahead.
"start collecting a new tax on medical devices from tongue depressors "
I can understand the right wing depression over this.
Heck! cutting govt spending will end Many jobs.
Sending must be cut, the only contention is what to cut.
Oh stop the "they did it too" bullshit.Bush/Cheney/Paulson put approximatly 11 million out of work with their home loan fraud scheme kinda like what Reagan/Bush did by way of their home loan fraud scam.
This is what keeps the economy from moving. The crooks got our bailout money and won't lend it out.
Read this and tell me what you think:
"Good Billions After Bad" - One Year After Wall Street Bailout, Pulitzer Winners Barlett and Steele Investigate Where All the Money Went
"start collecting a new tax on medical devices from tongue depressors "
I can understand the right wing depression over this.
Heck! cutting govt spending will end Many jobs.
Sending must be cut, the only contention is what to cut.
Great idea. Let's put more stress on the cost of services with additional taxes. That will solve shit.
The new 2.3 percent excise tax will roughly double their total tax bill and raise the average effective corporate income tax rate to one of the highest effective tax rates faced by any industry in the world.
Tongue-Depressor Tax Will Harm Jobs, Innovation: Ramesh Ponnuru - Bloomberg
"start collecting a new tax on medical devices from tongue depressors "
I can understand the right wing depression over this.
Heck! cutting govt spending will end Many jobs.
Sending must be cut, the only contention is what to cut.
Great idea. Let's put more stress on the cost of services with additional taxes. That will solve shit.
Might also cut some waste?
Btw I am neutral on the tax. Do not know enough about it yet.
Is this a new tax or just taxing them like if they were in any other business?
Cutting government employment is a GOOD thing."start collecting a new tax on medical devices from tongue depressors "
I can understand the right wing depression over this.
Heck! cutting govt spending will end Many jobs.
Sending must be cut, the only contention is what to cut.
