Taxes have consequences, and Obamacare is a tax. Reuters:
Nov 10 (Reuters) – Medical device maker Stryker Corp said it will cut 5 percent, or about 1000 jobs to largely offset costs related to the scheduled implementation of the new Medical Device Excise Tax in 2013.
“While it is still uncertain whether the device tax will exist in its current form come 2013, we believe that companies across the space will make moves to mitigate the P&L impact of the new excise tax,” Susquehanna International Group analyst David Turkaly wrote in a note.
KALAMAZOO — Stephen P. McMillan has been vocal about the negative affects the new Medical Device Excise Tax will have on Stryker Corp. and other medical device makers.
The tax, which is part of the Patient Protection and Affordable Care Act [Obummercare] signed into law on March 23, 2010 by President Barack Obama, requires the makers of various medical devices — from replacement hip joints to metal bedpans — to pay 2.3 percent of their gross U.S. revenues on such products beginning in 2013.
Steve Ferguson, the chairman of Cook Group, said a looming 2.3 percent excise tax on U.S. revenues from medical devices sales will kill 15 percent of Cook Medical’s profits.
“For a company like ours, which pays 35 percent of our net earnings in federal corporate taxes and another 4 to 5 percent in state and local corporate taxes, the excise tax translates to another payment that will consume 15 percent more of our earnings,” Ferguson told Indiana University’s Health Forum on medical technologies today. “This creates tremendous pressure for us to move manufacturing to Europe and other parts of the world.”
Cook Medical was on track to roll out new plants around the U.S. Those plans have been shelved due to the tax, Ferguson said, which is set to take effect in 2013.
Costs go up, and unless there is a bottomless pit of money somewhere, rising costs ultimately mean less care is delivered. You have to pass the bill to find out what’s in it, after all.
But the new law makes care “Affordable,” right? Right….