A year from now, the federal government will start collecting a new tax on medical devices -- from tongue depressors to imaging machines -- thanks to the sweeping health care overhaul that Democrats enacted in the spring of 2010.
People in the industry say it's already having an effect.
In November, citing the new tax, Stryker Corp., whose products include artificial hips and knees, announced that it would let go about 1,000 of its workers.
Earlier last year, Covidien, maker of surgical instruments, said it would lay off 200 workers in the United States and move production to Costa Rica and Mexico. It, too, cited the tax.
Other companies in the field have announced similar measures -- or plans to expand production overseas but not in the United States -- without mentioning the tax.
Of course, the negative effects of the device revenue tax go far beyond directly destroying jobs. Because the tax is on sales, rather than profits, it substantially raises the return hurdles required to fund investments in new medical technology. Yes, it acts directly to suppress innovation in health care. This is also not an accident. Liberal health care wonks have long asserted that most innovation in medical technology increases costs more than the public health benefit conferred by the innovation. -Tigerhawk
http://tigerhawk.blogspot.com/2012/01/job-killing-med-tech-tax.html
http://tigerhawk.blogspot.com/2012/01/job-killing-med-tech-tax.html
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