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The Innovation Tax : How Max Baucus's Health Care Plan will Knife the Medical Devices Industry.
Wall Street Journal ^ | 9/18/2009 | The Editors

Posted on 09/19/2009 10:12:30 AM PDT by SeekAndFind

Supposedly the Senate’s version of ObamaCare was written by Finance Chairman Max Baucus, but we’re beginning to wonder if the true authors were Abbott and Costello. The vaudeville logic of the plan is that Congress will tax health care to subsidize people to buy health care that new taxes and regulation make more expensive.

Look no further than the $40 billion "fee" that Mr. Baucus wants to impose on medical devices and diagnostic equipment. Device manufacturers would pay $4 billion a year in excise taxes, divvied up among them based on U.S. sales. This translates to an annual income tax surcharge anywhere from 10% to 30%, depending on the corporation.

Why $40 billion? No reason in particular, except that Mr. Baucus needs to finance nearly $900 billion in new spending and so he'll grab anything within arm's reach. While there are some exemptions, such as tongue depressors and eyeglasses, most of the devices tax will fall on hundreds of thousands of products that are basic components of modern medicine. Some are routine—surgical equipment, diabetes testing supplies—while others are cutting-edge technologies, like replacement joints, pacemakers, stents, and MRI and CT scanners.

This new tax will eventually be passed through to patients, increasing health-care costs. It will also harm innovation, taking a big bite out of the research and development that leads to medical advancements. The core of the industry (excluding a few conglomerates like Johnson & Johnson) spent about $9.6 billion on product development in 2007, according to Ernst and Young. The Baucus tax is nearly half that, and also exceeds $3.7 billion, the total venture capital invested in device makers that same year.

Even if consumers will ultimately pay one way or another, this tax also offers an instructive lesson in the perils of industry dealmaking in President Obama's Washington.

(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; Culture/Society; Editorial; News/Current Events
KEYWORDS: healthcare; maxbaucus; medicaldevice

1 posted on 09/19/2009 10:12:31 AM PDT by SeekAndFind
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To: SeekAndFind

I though the task of destroying this industry had been assigned to the malpractice bar. Silly me.


2 posted on 09/19/2009 10:36:29 AM PDT by La Lydia
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To: La Lydia

The more one taxes something, the less one will get of it.


3 posted on 09/19/2009 10:44:18 AM PDT by phormer phrog phlyer
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Comment #4 Removed by Moderator

To: La Lydia

Note the perverse nature of the ability of Congress to tax....

According to the article, most of the health-care lobbies decided to negotiate and pay ransoms so Democrats would spare their industries greater harm.

Sure enough, the device maker lobby, AdvaMed, was among the “stakeholders” that joined with Mr. Obama in a Rose Garden ceremony in May and pledged to “save” $2 trillion over 10 years to fund his program.

AdvaMed was nothing if not a team player. It endorsed Democratic inspirations like comparative-effectiveness research and value-based purchasing, despite the danger that under such centralized decision-making the government will decide that the most effective and valuable treatments also happen to be the cheapest—rather than those that are best for patients. It also suggested a variety of other taxes that would have resulted in a lower bottom line, much as Big Pharma promised $80 billion in drug discounts and the American Hospital Association agreed to $155 billion in Medicare and Medicaid reimbursement cuts.

But the word on Capitol Hill is that AdvaMed’s tribute wasn’t handsome enough for Mr. Baucus’s tastes. The massive new tax—which wasn’t a part of any of his policy blueprints released earlier this year—is in part retaliation. Partly, too, the device makers simply don’t have the same political clout as the other big players, making them an easier mark. Old Washington hands are saying the device lobby made a “strategic mistake” by not offering Mr. Baucus more protection money, but the real mistake was trying to buy into the ObamaCare process, instead of trying to defeat its worst ideas outright.


5 posted on 09/19/2009 11:14:46 AM PDT by SeekAndFind
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To: SeekAndFind

When are these AirHead Congress members going to realize that it’s not the medical industry that needs “fixin’” — it is the LAWYERS who need to be gelded when it comes to Tort Reform.

And the Insurance “fix” which will help many Insurance Companies is to allow them to offer insurance across State lines. There’s a name for that, isn’t there? My brain can’t recall it.

Uh oh, I guess I better hide quickly, or 0bamaCare will be handing me a blue-pill.


6 posted on 09/19/2009 11:37:05 AM PDT by HighlyOpinionated (Looking for Fraud? Waste? Abuse? Audit ACORN. Audit The Fed.)
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To: SeekAndFind

We can have the cheapest health care in the world. All we need to do is ban all medical procedures, ban the practice of medicine and shut down the hospitals and the savings in money will be tremendous.../s


7 posted on 09/19/2009 11:39:41 AM PDT by Cacique (quos Deus vult perdere, prius dementat ( Islamia Delenda Est ))
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To: muawiyah
My friend here is the WORD which states the destiny of these despicable oppressors:
Job 27:13-23
13This [which I am about to tell] is the portion of a wicked man with God, and the heritage which oppressors shall receive from the Almighty: 14If his children are multiplied, it is for the sword; and his offspring will not have sufficient bread. 15Those who survive him, [the pestilence] will bury, and [their] widows will make no lamentation. 16Though he heaps up silver like dust and piles up clothing like clay, 17He may prepare it, but the just will wear it, and the innocent will divide the silver. 18He builds his house like a moth or a spider, like a booth which a watchman makes [to last for a season]. 19[The wicked] will lie down rich, but does it not again; he opens his eyes, and [his wealth] is gone. 20Terrors overtake him like a [suddenly loosened] flood; a windstorm steals him away in the night. 21The east wind lifts him up, and he is gone; it sweeps him out of his place. 22For [God and the storm] hurl at him without pity and unsparingly [their thunderbolts of wrath]; he flees in haste before His power. 23[God causes] men to clap their hands at him [in malignant joy] and hiss him out of his place.

May GOD arise quickly and take up his broom to sweep these evil men out of the earth forever!! The name of a righteous man is a sweet memory and brings a smile to the face of all who remembers them, but the name of these wicked men will ROT in INFAMY FOREVER and become a curse and byword to all generations!!

9 posted on 09/19/2009 11:08:32 PM PDT by prophetic (0Bama = 1 illegal president = 32 illegal, unconstitutional & unnecessary CZARS to do his job!!)
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To: prophetic

Those ol’boys sure had the words for it didn’t they!


10 posted on 09/20/2009 5:51:59 AM PDT by muawiyah
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