Washington is infamous for their euphemisms. Abortion is “reproductive health.” Welfare is an “entitlement.” Health care is a “civil right.”
They’ve truly raised the bar with the nefarious “medical device excise tax.”
“Don’t worry, ” Obama tells doctors in the Oval Office, “The Chinese can make all that technology faster, better and cheaper.”
You can read a dozen stories about this and miss the gist of this benign taxing mechanism. It’s officially a 2.3% tax on medical device manufacturers (one of the few industries remaining in the U.S.).
Critics say it will raise $20 billion for Obamacare (all of which will reach the consumer, marked up 150% for bureaucratic red tape) and ten thousand jobs.
Then there’s that innocuous little word “excise.”
What this little word does is that it applies the tax to every U.S. manufacturer of every device, whether the company is making a profit or not. A 2.3% tax on profit is justifiable, if not reasonable. A 2.3% tax on a company struggling to break even – ON AN INDUSTRY WITH AN AVERAGE PROFIT MARGIN OF 2% – means death to the entire industry.
This tax will move the entire “medical device industry,” and 500,000 direct (plus 2 million indirect) jobs will move overseas.
To think that Obama accused Romney of outsourcing jobs via Bain Capitol. Obamacare does a hundred times more damage that Bain Capital ever did (and I object to any accusation that Bain Capital ever sent a single job overseas that could possible have been avoided).
The conservative media has raised such a stink about this tax that Democrats are starting to call for its repeal. With much bigger things going on right now, it’s pretty much a give than this tax will remain in place.
Take heart, though. Supporters of this tax say that Obamacare will create so many new health consumers that the medical device manufacturers will make a profit on increased volume. Yea, right…
Increased volume on products for which they lose a net1% on every sale. That will put them out of business even faster!
Modern math.
