Filed under: Capitalism, Economy, Health Care, Statism, Taxes | Tags: Democrat Corruption, Harry Reid, Nancy Pelosi
Nancy Pelosi was quite clear. The Health Care bill would create 400,000 jobs. She also said that we’d have to wait till we passed it to find out what’s in it. She was, at least dimly, aware that the voters are concerned about jobs.
Senate Majority Leader Harry Reid said, “This, of course, was a health bill. But it was also a jobs bill. Speaker Nancy Pelosi declared, “It will create millions of jobs and strengthen our economic security by keeping America competitive and igniting innovation and entrepreneurship.” If we ever needed proof that Democrats do not understand how jobs are created, there it is, laid out for all to see.
The 2006 law that created the Medicare Part D prescription drug benefit also authorized payment of a 28% federal subsidy, up to $1330 per retiree, tax-free, to each company for each retiree who took part in a company drug plan. Because of that subsidy, the retirees did not participate in the Part D prescription drug plan and saved the government some money. The subsidy was also tax-deductible.
The health care bill repeals that credit, which raises corporate tax bills and lowers after-tax income. Companies must immediately announce the write-downs . Consulting firm Towers Watson anticipates write-downs of approximately $14 billion. Reduced profits and retained earnings may mean fewer jobs.
A levy on the production of medical devices is meant to help pay for health care. Starting in 2013, an excise tax of 2.3% of the sales of taxable medical devices will be imposed. The tax is estimated to raise about $2 billion a year. Congress supposedly believed that the health care bill would expand the market for medical devices through the individual mandate thereby increasing revenue to the medical device companies. The real reason is that Democrats were desperate for revenue so that the bill would be scored as reducing federal budget deficits — something it could not do without some budget gimmicks.
The medical device industry exported more than $31 billion of devices in 2008 to such markets as Japan, the Netherlands, Canada and Germany. And the U.S. also imports devices. The hit on the industry is estimated to be about $20 billion.
Zoll Medical Corporation in Massachusetts, a maker of defibrillators, had a 2009 profit of $9.5 million. They estimate their tax at $5 million to $10 million a year. They employ 1800 people, 1600 in the United States. They will have to change — raise prices, but the government is demanding that they cut costs — or shift jobs to lower cost countries. Manufacturers can close plants in this country and relocate offshore. Medtronic has announced that it may lay off workers as a direct consequence of the bill.
Taxes and mandates and fees all have consequences. There are a lot of job losses resulting from the consequences of the health care bill. Unfortunately Nancy Pelosi’s “millions of jobs” and “economic security” just aren’t in it.
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