Monday, September 14, 2009

ObamaWorld is Already Here: Tax on Medical Technology

TigerHawk reports: Senate Democrats are proposing to do so directly, by levying a "value added tax" on medical device companies according to their proportion of U.S. sales. This tax would be without regard to profitability, so it would amount to a capital tax on start-ups and a massive income tax surcharge on profitable companies, varying as net margins do. In the case of my own mid-sized company, the tax would be the equivalent of a roughly 20% surcharge on our net income (in all likelihood raising our economic tax rate well above 50%) or 50% of our research and development budget, depending on how you want to look at it.

Increase risk and decrease return on medical innovation. That's ObamaCare. It's straight out of Atlas Shrugged. Their nominal logic is that these innovations are the proximate cause of the increase in treatment costs, so taxing the innovations to pay for the treatments seems like putting the burden where it should be. Only in the minds of politicians could this be entertained as logical . . .and that is one good reason to keep these decisions out of the hands of politicians.

Who benefits from this sort of policy? Only the people in power benefit!

Get well soon.

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