Democrat Senators: Wait, there is a medical device tax in Obamacare?

If find it pretty much unacceptable, but completely normal, for 18 Democrats to “all of a sudden” realize there is a medical device excise tax of “only” 2.3 percent in the Affordable Health Care Act. Of course, they found out about this “hidden” tax in December, after the election was over.

The first reference Radio Vice Online made to the medical device tax was in Sept. 2009, when the Sound Off Sister wrote an article pointing us to a Wall Street Journal piece. This was not the final language included in Obamacare, but Congress and the president liked the idea of taxing an industry that was doing well … they had to pay their fair share.

An annual “fee” of $4 billion is imposed on manufacturers and importers of medical devices (page 218) as pointed out by the Wall Street Journal,

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.

Then House Speaker Nancy Pelisi (D-Calif.) told us Americans would have to wait to see what was in the legislation until after it was passed and implemented, and now – days before the implementation of the tax hikes and only after the election – 18 Democrat Senators realize this part of the legislation is no good?

Last month, 18 Democratic senators and senators-elect (including New York’s own Sens. Charles Schumer and Kirsten Gillibrand) wrote Majority Leader Harry Reid, asking him to delay implementation of this 2.3 percent excise tax on the sales of everything from pacemakers to tongue depressors. The House already voted to repeal the tax, which is projected to extract as much as $29 billion from medical-device firms.

This is your Senate. These are the people we’ve elected to represent the states.

There’s a reason that lawmakers from both parties are looking to scrap the tax: It will cost many Americans their jobs, stifle innovation and lower job-creation in the sector.

I thought ensuring big business and the rich people paying their fair share was the right thing to do? If a “small” 2.3 percent tax on a successful industry is bad juju, why is it absolutely necessary the successful individuals who make more than $200,000 to $250,000 or more to pay a higher income tax? Many of those individuals are business owners themselves, who hire people, create new products and services that are innovative, and expand their business to hire more individuals in the future.

Nope, they are still targets. I’m so damn confused…

The tax will also put a damper on medical innovation. Most new medical devices are invented by small, venture-backed companies that invest heavily in research and development — and so run losses for years before getting their device approved by federal regulators and ultimately turning a profit.

If they come up with a promising prototype, their financial futures are still not secure. Bringing a new, low-risk medical device from concept to market can cost around $31 million — $24 million for activities related to gaining regulatory approval.

Yet the tax applies to gross sales of applicable devices, regardless of a company’s profitability or ability to pay. So companies with weak balance sheets (innovative small firms among them) may face bankruptcy.

So the entire argument these 18 Democrat senators have put forward is directly out of Chapter 1 of the  conservative/capitalist playbook. That’s priceless.

Steve McGough

Steve's a part-time conservative blogger. Steve grew up in Connecticut and has lived in Washington, D.C. and the Bahamas. He resides in Connecticut, where he’s comfortable six months of the year.

25 Comments

  1. Lynn on January 8, 2013 at 8:01 am

    Hypocrisy in the Democratically controlled Senate? I’m shocked.



  2. SeeingRed on January 8, 2013 at 8:20 am

    Democrats.
    My reply would be: too bad you didn’t read it.? dSeriously, didn’t see the presser with Queen Pelosi as she declared that they had to pass the (stinkin’) bill to see what is in it?



    • Dimsdale on January 8, 2013 at 11:24 am

      My thoughts exactly.? Much like the recent “fiscal cliff” agreement, where the Senate purportedly had three minutes to read 150 pages of legislation before they voted on it, ?bamacare was passed without the any of the legislators (and I use that term loosely) knowing what was in it, as evidenced by Steve’s post.?
      ?
      This is de facto evidence that they are simply not doing what we elect and pay them to do, i.e. their job.
      ?
      Everyone of them should be asked to justify their position, and failing that, be fired, or have the decency to resign.?? I wouldn’t count on their decency….



    • JBS on January 8, 2013 at 7:07 pm

      I would be in favor of a 30-day review period for any bills. That would give everyone a chance to not only read but to comment on the merits of the bill BEFORE it becomes law.
      ?
      Nah, that wouldn’t ever happen. It’s too sensible.
      And, it wouldn’t allow for the CongressCritter’s staffs to attach amendments to bills, that have nothing to do with those bills, except for providing free money to their cronies, err, constituents.
      Being in Congress requires constant campaigning and constant doling out of the pork.



    • Dimsdale on January 13, 2013 at 1:18 pm

      Hell, they had a three day review requirement that they couldn’t even honor!
      ?
      I guess you can’t swallow bitter (poison?) pills unless you do it quickly (and in the dark).



  3. JBS on January 8, 2013 at 8:21 am

    ?
    Democrats admit they didn’t know what they were doing?????? LOL
    Let me get this straight . . . a 2.3% tax on gross sales of medical devices will cost jobs . . . private sector jobs that pay wages and salaries from private company sales to whomever . . . salaries of people who are PULLING THE WAGON for all of the takers . . . yet, a 2% rise of income taxes for everyone? is a good thing for the economy?????
    ?
    Once again, the Democrats are playing fast and loose with the truth and reality.
    ?
    I will amend the quote to now read, ” . . . three kinds of lies. There are lies, damn lies and Democrat lies.”
    ?



  4. Marilyn on January 8, 2013 at 8:22 am

    I E-Mailed my Senator Kerry and asked ; what are you doing?? You voted for this bill and the President needs the money.



  5. Plainvillian on January 8, 2013 at 8:49 am

    18 Democrat Senators.? 18?? Only 18?? That must mean the other 35+ must be all okay with this tax, right??
    Recidivism, er reelection, is assured, though.? Never mind.



    • Lynn on January 8, 2013 at 10:38 am

      It means the 18 Senators have businesses that make medical devices in their state, and the other 35 do not. Always follow the campaign contributions



  6. Common Man on January 8, 2013 at 9:42 am

    Keep electing the Jackass & you will keep getting kicked.



  7. Don Lombardo on January 8, 2013 at 10:47 am

    Those 18 are probably up for re-election in 2 years. Here come the waivers.



    • Dimsdale on January 8, 2013 at 11:26 am

      They should outlaw waivers, as they only seem to be applied to their friends and supporters, allowing them to keep the taxes on those they don’t “approve” of.??
      ?
      Waivers simply free them from having to consider their actions before passing this defective legislation.



  8. sammy22 on January 8, 2013 at 1:24 pm

    I think Congress has Committees to sift through proposed legislation, so that individual members do not have to read every piece of legislation that comes along. Also each member has a staff presumably to read legislative proposals. Isn’t this the way the legislative system was set up to work?



    • Lynn on January 8, 2013 at 1:38 pm

      No



    • Steve McGough on January 8, 2013 at 5:13 pm

      I’m waiting for one of those Democrats who voted for Obamacare to fire someone in their office for not telling them about the medical device tax and how?devastating?it will be. Now they see this as bad legislation?



  9. stinkfoot on January 8, 2013 at 2:03 pm

    Surprise and shock are convenient covers for the fact that they really couldn’t care less.? I don’t buy into their supposed ignorance, sorry.



  10. sammy22 on January 8, 2013 at 4:32 pm

    Sorry, Lynn, but THEY make the rules.



    • Steve McGough on January 8, 2013 at 5:11 pm

      What, is Congress some sort of multi-personality dictatorship? I guess you’re OK with a ruling class? I’m not. You may think it’s OK for someone in Congress to complain about legislation one year after they voted for it, but I don’t. As noted, everyone knew about the medical device tax and many reported on it. Those 18 Democrats either ignored it at the time, or used it as a political ploy for votes. You may think that’s acceptable, but I don’t. I have high standards when it comes to the elected officials representing the people in federal government.



  11. sammy22 on January 8, 2013 at 6:11 pm

    I don’t think this acceptable at all. All I am saying is that congressmen make the rules. We keep (or have no “other” choice) on electing them to office. Sounds callous? Maybe so, but I have to see an avenue out of the system that we (the electorate) have allowed to come to pass.



    • JBS on January 8, 2013 at 7:11 pm

      ?
      How about following the Constitution?



  12. Gary J on January 8, 2013 at 7:27 pm

    What constitution? if you google “artist that painted obama stepping on the constitution” you’ll come up with? Jon McNaughton worth taking a look and buying a print.



  13. JollyRoger on January 9, 2013 at 1:45 am

    I hope there’s not a tax on IUD’s because that could be perceived as a “War-On-Women”!?
    Yes, Sammy, they “presumably” read that legislation.? I’d presume, on the toilet between latte grandes and soirets where they spend all of their energy kissing arse and trying to advance their personal careers by suggesting ever more brilliant legislation.? It’s Bureaucratic Diarrhea!



  14. Lynn on January 9, 2013 at 7:56 am

    Sammy, I do understand what you are saying. I really don’t know how to insist Congress read bills before they vote and adopt a budget, or any other job they are supposed to do. I know the electorate can petition a Constitutional Amendment ?that essentially is The proposed Congressional Reform Act of 2009. However, do We have the will?



  15. dennis on January 9, 2013 at 11:26 am

    None of this matters. The Tax will be passed on to the “tax payers”. The 47% who do not pay taxes and vote for anyone with a D after their name will never pay it because it will be paid by the single payer system that is about to happen. All the Senators and Reps will be re elected by those takers and Low Information voters.?Anyone in the private sector who just let things happen without reading or doing their job would not have a job very long. And those staff members who read for the?elected officials are paid with Taxpayer dollars, maybe they should be put up for election instead of the senators and Reps, they are the ones doing the work???LOL??



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