This tax makes no sense. They want to offsest some of the costs of Obamacare by imposing a tax on medical devices which will increase the costs of Obamacare the exact same amount as the tax.
Damn it, it is not, not just 2.3% tax, it is 2.3% on sales. So, if they sell a billion dollars of equipment it is 230,000 dollar tax. If they had a 20% margin and made 200 million and this 2.3% on profits, it would be 46,000, a huge burden to a compange.
“This tax makes no sense. They want to offsest some of the costs of Obamacare by imposing a tax on medical devices which will increase the costs of Obamacare the exact same amount as the tax.”
Actually, it will increase the costs of obamacare exponentially. With the increased cost input, the mark ups (% increases for SGA, Profit, etc.) are increased at a higher rate. For example, if you have a $100 device the pass through cost to the customer would be $110 (ish), however if the tax makes it $102.30, then it is now a $112.53.
My example above is meant for illustrative purposes only. I am not in the medical industry and I don’t know their cost structure, however every product has mark ups of varying kinds.