Posted on 12/03/2012 5:14:45 PM PST by SeekAndFind
Thanks to the 62,615,406 individuals who took off their thinking caps and re-elected President Barack Obama, thousands upon thousands of folks are receiving their pink slips now or soon will over the next several weeks or months. These lost jobs are often high-paying and are disappearing by the hour.
The culprit? It's none other than Obama's landmark legislation, The Affordable Care Act, aka ObamaCare.
Re-electing Barack Obama guaranteed that the 2.3% medical device tax, a key funding source for ObamaCare, will go into effect on January 1, 2013. This transfer of money from these companies to the federal government, which is effectively a far higher amount than it first appears, is producing massive layoffs in one of the most innovative and life-saving industries in America.
Understand that this 2.3% tax is not on the earnings of medical device makers; rather, it's on the top line, meaning the revenues of the company. So regardless of whether the medical equipment makers earn one red cent, they will still have to pay the tax.
Medical device makers, with a few exceptions, are largely small to mid-sized companies. They are typically job-creators, but thanks to the ObamaCare tax, they, for their very survival, have become job-eliminators...just in time for the holidays.
Take for example industry behemoth Stryker Corporation, which produces, among other items, a host of orthopedic devices. Stryker is reducing its workforce by 5% in response to the medical equipment tax.
It's been estimated that the 2.3% medical device revenue tax equates to an actual 15% tax on corporate earnings for some of these companies. This is substantial, and all because this industry has been selected to fund Obama's landmark legislation.
The list of job layoffs in this industry is staggering. Some examples:
(Excerpt) Read more at americanthinker.com ...
http://www.cnycentral.com/news/story.aspx?id=799159#.UL1NnOQxT-4
Welch Allyn to cut 275 jobs over next three years
EXCERPT:
Company leaders say the cuts are part of a restructuring plan. They blame the layoffs on the new medical device tax set to take effect next year as part of the Affordable Care Act. The mandate requires a 2.3% tax on sales of medical devices.
“This restructuring plan will help us maintain competitive levels of investment in new products and technologies that are necessary to meet the changing needs of the global healthcare environment,” stated Meyer.
___________________________________
See here:
http://www.massdevice.com/news/layoffs-medtronic-cut-another-500-jobs-hopes-saving-125m-year
Medtronic to cut another 500 jobs in hopes of saving $125M per year
________________________________
Also see here:
http://www.massdevice.com/news/zimmer-axes-jobs-cut-costs-ahead-med-tech-tax-personnel-moves
Zimmer axes jobs to cut costs ahead of med-tech tax | Personnel Moves
EXCERPT:
Zimmer plans cuts and outsourcing at its Warsaw, Ind., headquarters partially to offset the impending burden of a 2.3% medical device tax.
Zimmer Holdings (NYSE:ZMH) announced layoffs at its Warsaw, Ind., headquarters, pointing to the expected burden of the medical device tax as partly responsible for some of the losses.
RSNA was very slow last week. Was the slowest I’ve ever seen it in 20 years in the medical business.
Since my industry does not have “29” hour employees, I suspect we may all become 1099 employees, which, could be a good thing, at the end of the day.
If all employees had to make quarterly payments to the IRS, along with the full amount of MedicCare and Social Security, I think that may actually sway the American People.
I help companies with their HIPAA compliance. Business is a boomin.
It’ll last until BO takes over the healthcare industry. Sadly HHS doesn’t comply with their own security rules.
Guess what happens when a 1099 employee doesn’t make their tax payments?
The IRS goes after the employer. Many people claiming 1099 don’t actually qualify.
Guess I should anticipate my 99 weeks of unemplyemnt soon....
“They are typically job-creators, but thanks to the ObamaCare tax, they, for their very survival, have become job-eliminators...just in time for the holidays.”
Well, I can’t be responsible for every undercapitalized company in America!! - Hillary Clinton.
I suspect the obama people will say the same thing if questioned.
First, let me say that 0bamacare is still, and always has been, a piece of legislative effluent from the cesspool mind of an illegal alien usurper.
That being said, I also am NOT ready to buy into this notion either, that these companies are laying off due to the taxes included in the commie crap that is 0bamacare.
The tax applies to all medical device makers. As with other taxes, manufacturers will pass this along to consumers via higher prices. If there is evidence to the contrary, I’ve not seen it.
Perhaps the fine economic minds on FR can explain.
“Since my industry does not have “29” hour employees...”
Please be careful you do not run afoul of “independent contractor” regulations and the hazards of attempting to apply them to erstwhile employees. Calling them ICs does not make them ICs.
(sigh) I was hoping I could say this to him. Oh, well...
Actually, I don’t think this is the case. I work in the Medical Device industry. Most medical device products are not directly purchased by consumers but by intermediaries - clinical labs, hospitals, etc. - who are then dealing with insurance companies who negotiate the price further. There is no way to directly raise the price. More companies than not will simply eat the cost - and act accordingly.
Yup!...and liberal logic says that will make Obama care cheaper because Obamacare is free and the Govt has more tax money!
My guess is that the US companies will have to cut costs so as to compete with foreign makers of medical devices or US companies making the devices overseas. I don’t think simply raising the price of the device will be feasible or possible.
Obamanation style Communism File.
The company I work for just layer off 20% of their manufacturing line people. Normally the business is pretty stable and grew a lot even through the downturn with a mix of consumer, military and multiple comercial markets, but they’ve got too much inventory and sales are way down. Companies aren’t making the upgrade investments and rebuilding after Sandy is going very slowly so we aren’t seeing much of that business yet. Sequestration is also threatening to hit us hard as our military contracts a in negotiations and are likely to see deep cuts.
Surprisingly our health benefits costs did not go up this year. I don’t know the full story but am told that restrictions on insurance company profits under Obamacare held them back them from increasing premiums. The only question is much of that will insurance companies take before they decide the business isn’t worth it and get out.
The tax is on gross sales..2.5%. Since most manufacturers have an after tax profit of around 5% of sales..it means their profits are cut by 50%. Now they can raise prices, but then volume may fall and foreign competition might take some of their sales. Plus some products that are marginal may start being a loss and be eliminated. All that means that any company will try to cut expenses and less than good profit lines..and that means lower employment.
Problem isn’t the cost to make the product in most cases though that is a partial driver. The real cost is in the development and regulatory burden. In the Cleveland area there are numerous companies with minimal consumer issues that are under tremendous regulatory strain from enforcement activities. Yes there are always a few bad players but the majority by far do not have injuries or harm any worse than your average consumer product. To develop and document a product takes engineers working for up to two years with the hope that they will deliver a product that will win the market - no guarantee even after market research and surveys of what is needed. So where does that cost (and the new obamacare excuse tax) go? Into the product sales price for recompense. QED
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.