Ronald Reagan famously said of the government solution to everything: "If it moves tax it. If it keeps moving, regulate it. If it stops moving, subsidize it."
Everyone knows that if you want less of something, tax it. And that is true, not only of goods, but also innovation.
Now I hold out very little hope that the next Congress will do anything positive. I think the illegal executive amnesty is a shell game where Congressman and Senators talk tough now but backroom deals have been crafted between the Dems and the Republicans to make it appear that they're trying to stop our King, but nothing will be done. Yes, I admit, that's rather cynical. I hope they prove me wrong.
I also have little confidence that anything will be done about Obamacare. However, one thing that could be done now is repeal of the medical device tax. This tax has already done much damage to the industry and it's just begun.
Heck, even Joke-A-Hontas, Elizabeth Warren, the Marxist of Massachusetts said the device tax "pushes companies of all sizes to cut back on research and development for life-saving products."
Don't you just love when tax-and-spend liberals complain about taxes? It's quite revealing. It's like a drug addict that knows his habit is killing him, but he must have it anyway. Liberals like Warren know logically that taxes stifle growth and innovation but they just have to have that revenue stream.
The medical device tax has only been in effect for a few years but it is already exacting a heavy toll. Two years ago, Bill Flax at Forbes.com wrote "Due to the medical device tax, Cook Medical, America's largest privately owned medical device manufacturer has been adamant that shrinking margins may force investment overseas. 'Cook will no longer be able to expand our manufacturing in the United States,' said company spokesman Allison Giles. 'We've already resisted going abroad' but due to diminishing returns 'decisions will have to be made.' Cook scuttled plans for five additional plants across the Midwest. It expects the device tax could cost $30 million annually, roughly equivalent to constructing its new Canton Illinois factory."
That's right folks – $30 million a year +5 new facilities that won't get built.
Stryker, which manufactures hip and knee replacements, says it will have to trim its research and development budget by more than 30%. Nuvasive, which makes surgical spinal implants, says it will have to cut back and will be instituting a hiring freeze.
We're not just talking the loss of thousands of jobs – although the industry trade group AdvaMed recently reported that the device tax cost around 33,000 jobs the first year alone.
It's not just unskilled labor being trashed by Obama and the Democrats. These are highly skilled professionals who lost their jobs or were not otherwise hired because of this oppressive tax.
Many of these medical device companies – these medical innovators, 80% in fact, who bring us amazing new inventions and discoveries – are small startup companies. These entrepreneurs invent better mouse traps and want to bring them to market. It can be years before some of these startups become profitable. But, because the device tax is based on sales, not profits, these small firms have to pay the tax anyway. Thus, a lot of these companies will be driven out of business before they even see a profit.
Companies are shuttering their businesses while others are simply moving.
Medtronic, which has been headquartered in Minnesota for nearly 70 years, will soon be moving its nominal headquarters to Ireland.
In September, Florida Medical Manufacturers Consortium reported that "Research and development spending is also plunging, thanks to the tax. Utah's BD Medical has cut spending on R&D, partially because of its $55 million device tax bill. Indiana-based OrthoPediatrics, a manufacturer of orthopedic devices for children, has cut its product development budget as well, saying 'we're developing less products than we otherwise would.'"
Did you hear that, Democrats?! Devices for children won't be made because of your lousy tax!
This tax has already cost untold jobs, but just look at the other damage its doing. Imagine the medical breakthroughs that now won't happen due to one oppressive tax.
Come on Congress – repeal this tax. Do one thing right for a change!Don't forget to Like Freedom Outpost on Facebook, Google Plus, & Twitter. You can also get Freedom Outpost delivered to your Amazon Kindle device here.