Having voted for it, liberal Democrats find out what’s in ObummerKare and they don’t like it



18 Democrat Senators ask Harry Reid to please defer implementation of the Obama excise tax on medical devices. Turns out, innovative medical device manufacturers employ tens of thousands of workers and because they’re mostly start ups, don’t have the profits to absorb a 2.3% penalty on gross receipts. In fact, that amount exceeds the profits. Obumpski had argued that the afflicted companies could make up in volume what they lost on individual sales but someone got through to these 18 clowns and explained basic economics 101 to them.


Too late, fools, the party’s just begun.



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32 responses to “Having voted for it, liberal Democrats find out what’s in ObummerKare and they don’t like it

  1. Reader

    2 Senators from Minnesota (home of Medtronic and St Jude Medical), 1 from Indiana (home of Guidant), and 1 from Massachusetts (home of Boston Scientific). All of them voted for the bill. Oops.

  2. AJ

    Please correct me if I’m wrong, but wouldn’t taxing on gross be taxing, in part, on money never made, e.g. if it costs a dollar fifty to make something and you sell it for two dollars, then you only made fifty cents less other expenses to bring your product to market? That would be, I believe, taxing someone on their expenses (money someone else made).

  3. JRH

    There are a couple problems with this.

    For one, let’s not pretend this is about principles: these senators all represent states with a significant medical device industry. Like all companies, these ones don’t want to pay higher taxes. Fine. The logic of the tax, though, isn’t just “let’s take money from these companies.” These firms are beneficiaries of the Affordable Care Act’s coverage expansion: 30+ million more insured people means more demand for the devices these firms make. The logic: if you’re partially benefiting from the law, you ought to partially contribute to its funding.

    Again, CF is casual with the facts (or at least their implications) when he claims that medical device manufacturers “are mostly startups.” Well, 10 device manufacturers are responsible for 86 percent of sales — a truth that tells a different story.

    In fact, several medical device CEOs are calling shenanigans on the doomsday scenarios. Take, for example, Bob DeAngelis, an executive with medical device manufacturer Katahdin. His take? “I’m not terribly upset we’re going to have a tax on medical devices. I think it’s overblown. [Opponents] say[] we ‘shouldn’t be taxing the job creators.’ That sounds great but what does that mean. He’s not talking about me. I’m going to hire based on people buying my product.” Consider that! Or Michael Boyle, founder of SDI Diagnostics: “I’m never in favor of paying more tax if it can be avoided. However, it really infuriates me when politicians say that people won’t hire because they have to pay a tax. If your business is growing and you need people to help sustain the growth you’re going to hire. It’s nothing but political sloganeering to say that a tax like this is a job killer. It’s not a job killer. It would never stop a responsible manager from hiring people when it’s time to grow the business. You bring in millions more people into the health care market and these people are going to use goods and services. My company and every other company, if we operate our business responsibly we are going to share in that. We’re going to give you 10 more in business and take a dollar in taxes, and you mean you won’t hire more people because we’re going to take that one dollar? It makes no sense. It’s nothing but political pandering.” (Source.)

    What about the decidedly non-left Bloomberg News take on this? “Just about everything the medical-device industry says about the tax is either untrue or exaggerated.”

    • JRH

      An additional casual confusion of the facts is the claim about profit margins in the industry falling below the 2.3% that the tax would levy on gross receipts — just not so.

      “[P]rofit margins on medical devices are also among the highest for any medical products — over 20 percent, in the case of a defibrillator or an artificial hip, according to analysts.”

      • hmmm


        what are you talking about? are you calling out the senators or the corporations? these senators were forced to vote for the bill and had no choice principles were never an issue period, not now and not then.

  4. Have you read it ?
    I will after I finish reading 17,787 pages of Tax Regulations…..

  5. Anonymous

    AJ- Just like a sales tax. At almost 7% Ct. makes more on a sale than the store or supplier often nets, but with none of the business risk.

  6. ajnock

    Why in hell is Boehner not calling a press conference and shouting out the names of these 18 jackals…proving that even these dimwits want to now repeal selective parts of this hideous law.

  7. AJ

    Anonymous @ 3:55. With sales tax you get a tax number so that you don’t pay the sales tax on business related expenses, you just give the vendor your tax number, also the tax is an add on at point of sale so that it’s obvious to a customer that he’s paying an add on to the government and is not part of price. The way it’s presented in the CF post seems to indicate an annual add on that would have to come out of profit, and not an extra added at, and to be paid at, point of sale.

  8. Al Dente

    Specifics about future doctor-patient interactions are beginning to surface, and they are shocking: http://www.spnheadlines.com/2010/03/obama-health-care-doctors-will-patients_17.html

  9. Balzac

    If you tax something, you’ll get less of it. This tax does mean less medical innovation in devices. Obama is OK with the sacrifice of innovation in favor of expansion of coverage, and expansion of government.

    • JRH

      Balzac, as I said, seems like a couple of medical device company CEOs seem to disagree with you. Besides, your “analysis,” such as it is, omits any consideration of the fact that these companies reap an enormous benefit from the law, viz., 33 million more insured to increase demand for their products.

  10. Anonymous2

    JRH – “decidedly non-left Bloomberg News”….are you crazy? Did you ever work there?

  11. I thought higher taxes meant faster economic growth and more jobs. Now these 18 Senators say it doesn’t? That instead it will cause job losses? Say it ain’t so!

    • hmmm

      and greg let’s not forget the bad bad bad bush tax cuts that were only for the wealthy but all of the dems seem to want to preserve them for 98% of the folks otherwise their taxes will increase as well…i guess they did benefit after all….

  12. stand your ground jrh

    Investigators said a Craigslist ad for a four-wheeler led to an attempted robbery and deadly shooting in Seminole County Saturday afternoon.

    The incident happened around 3:30 p.m. in the parking lot of an apartment complex off Canterbury Drive in Lake Mary.

    Investigators said two suspects tried to rob two men who were selling a four-wheeler on Craigslist.

    The men agreed to meet near the leasing office of the apartment complex to do the sale, deputies said. But when they both got there, the deal did not go as planned.

    “Those two men jumped into the back of the lighter car, put guns to the back of their head and proceeded to rob them,” said Heather Smith with the Seminole County Sheriff’s Office.

    But deputies said the victims had a gun of their own and opened fire on the suspects, killing one of them and injuring the other.

    According to officials, both suspects tried to leave the scene in their car, but the fatally wounded suspect lost control of the vehicle not far away. The injured suspect, who had been shot multiple times, fled the scene on foot and was found hiding under a duplex nearby.

    The two victims were not injured and they are not facing any charges at this point, deputies said. Officials have not released the identities of either suspect.

  13. db

    A bit amusing that with the only factual post, JRH’s, no one responds to the facts.

  14. Really. This is the mayor who’s regulating soft drink serving sizes.

  15. Anonymous

    33 million newly insured? – those are mostly the 18-26 year olds who can now sponge off their parents insurance policies. Highly unlikely they will need hip or knee replacements in the near future. So the med device companies will not benefit from new customers.

    • JRH

      Not very convincing, Anonymous. Only about 3 million beneficiaries from increase in dependents-on-plan from 25 to 26 years (for one, it requires your parents to have insurance, so no benefit for the children of the uninsured). That leaves around 30 million new beneficiaries. Of course, medical devices are not just for hip and knee replacements, too, so also unconvincing on that count.

  16. Riverside Dog Walker

    I don’t know anything about medical devices and hope that I never will. But I do think I know a bit about business (which is actually incredibly simple) and simple arithmetic. If a 2.3% tax or shortfall exceeds profits, this is not a business, much less a good business. Maybe it is a zombie business. Maybe it is a firm run for the benefit of its employees, not its shareholders, such as most publicly traded Wall Street firms are.

    If you can’t bring at least 10% of your top line revenue to bottom line profit, you need to do something else, given the risks involved, unless the top line revenue is just extremely high. Personally, I’m not interested unless I can drop at least 20% of revenue to the bottom line, given risk, reward, and opportunity cost. High margin businesses such as software (write once, sell many) typically drop 40-50% to the bottom line, like Microsoft did back in the day, but not anymore.

    • The reference to barely profitable – or unprofitable businesses was to small start ups with innovative products still in the development stage. For those companies, a 3% excise tax can indeed be a killer. You, like the rest of us, may hope you’ll never have to depend on medical devices and perhaps you won’t – one of the few exemptions from this tax is for contact lenses and if that’s all you’ll need going forward, you’re safe, but if you ever do need something more complicated you might wish that you and the country weren’t entirely dependent on products developed by a handful of very, very large companies – innovation and new ideas seem to get cramped at large institutions.

      • Peg

        For those who shriek about specifics in health care yet don’t look at human incentives and our laws – think about something like birth control. Our options are far more limited than they might be – because we hold companies to too high a standard when it comes to giving people choices as to what they will use. You cannot provide devices nor medications that are 100% safe in all instances. While we clearly need certain protections – looking for nirvana has left us with companies that refuse to even attempt to innovate and provide.

        Same thing with taxes. If you construct laws that are so onerous, you simply end up with NOTHING instead of something. And so it will be with this specific tax, unless enough politicians come to their senses.

  17. Peg

    I’ve been amused by JRH’s run to challenge $Bill as the village idiot liberal. But – I second Riverside DW’s point about business. You cannnot tax businesses as Obamacare details for medical device companies, and allow all of the good ones to stay afloat.

    Some of the Democrat politicians in my state are now realizing this because it’s going to harm good companies in their neck of the woods. It’s sad, however, that they cannot extend this principle to our government overall…. you cannot tax and spend our nation into prosperity.

    As Pelosi said – we had to read Obamacare to know what was in it. Now that we do, more and more are realizing what a disaster it will be.

    For those who start screaming about health care reform – I agree that it is needed. Obamacare, however, is not the answer.

    My expectations that we’ll get a “do-over” anytime soon are slim and none. Nevertheless, perhaps the realization by some Democrats that what they actually put into law ain’t so hot will at least give us some modest moves into a better direction. Here’s hoping.

  18. Inagua

    Peg – The only chance for a free market based do-over was lost when Obama won reelection. There will be a series of gradual adjustments because of the inevitable cost overruns, and they will all be in the direction of the ultimate goal of most Democrats, single payer. Obama Care was the irreversible beginning of the fulfillment of the progressive dream to turn America into a European style social welfare state. The safety net assistance model to ward off destitution was not enough for them; Democrats have long strived for, and now almost have, a full blown middle class entitlement society, where a majority of citizens rely on government for a significant part of their sustenance.

  19. Anonymous

    JRH states “Only about 3 million beneficiaries from increase in dependents-on-plan from 25 to 26 years “…what about the 18-25 year olds?

  20. Peg

    Inagua – you are likely accurate. The disaster that America has become is a bright spot in my life for one reason. Now I won’t mind dying earlier. At least if I do, I’ll not have to watch the greatest nation ever go down the tubes for as long……………………