Now that the bill is passed and we can see what’s in it, there is a real job killer in the medical devices tax. A 2.3% excise tax will be levied on the total revenues of a company, regardless of the amount of profit a company generates or whether a company generates a profit at all, starting in 2013. Many young or start up companies will owe more in taxes than they generate from their operations. The result will be devastating to innovation, patient care and job creation.
How does this kill jobs? The 2.3% tax is on gross revenues. To maintain profit levels, or simply break even, the company will have to raise prices (by more than 2.3% because the tax is on the gross) or cut expenses. Cutting expenses eventually means cutting people, either directly in the company or indirectly.
The people who crafted this tax rationalized that with more people covered by 0bamacare, companies will make more money. The experience with Romneycare proved otherwise. New research shows that despite providing near-universal health care coverage in the state of Massachusetts, the overwhelming percentage of medical device companies saw no increases in utilization, and in turn profits. This debunks the argument for supporters of the 2.3 % medical device excise tax.
This is also killing my business – three clients cancelled projects, citing the costs from 0bamacare.
First, I was working for a sensor company whose customer base was heavily dependent on medical device companies.
I spoke with many medical device companies and they were all telling me where this was heading.
You are correct, but it gets worse.
In order to control costs, the IPAB will stop the approval of new medical devices utilizing the latest technology. At that point, medical device companies will have to milk existing systems for additional profit.
Once they cut costs, the next logical step is to outsource production to low-wage nations.
The result: a loss of US jobs and no new medical devices that will prolong lifespans.
Medical device companies will be targeted by liberals for trying to raise prices (greed) and they will be targeted for exporting jobs.
This will set the stage for nationalization of these, and other, companies.
Remember, Obamacare is just the start of taking over as much of the economy as possible. Insurance companies will fall first, followed by hospitals and clinics.
Healthcare workers (doctors, nurses) will be unionized under SEIU to ensure a permanent voting block. (imagine a conservative proposing cuts when millions depend on those jobs?)