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ObamaCare: Taxing Away Our Healthy Future July 8, 2013 12:01 PM | Tagged as Obamacare, tax policy

WSJ July 8, 2013, Page A17 – “Another ObamaCare Tax That Is Bad for Your Health” by Burbank and Fogarty

On January 1st this year, ObamaCare imposed a 2.3% tax on medical device companies. That seems to be a small pittance for such a lucrative industry, right? Wrong. The 2.3% is on revenues, not profits. Using the income statement for Johnson and Johnson as a surrogate for a medical device startup (J&J was mentioned in the article), the 2.3% tax on revenues is equivalent to 14.3% on profits. This is on top of the highest corporate income tax rate in the world.

Unlike pharmacological innovations which are the result of large companies, medical devices usually start with a garage-sized lab, a doctor with an idea, and venture capitalist funding.

How many venture capitalists are going to invest in a company with an additional 14.3% tax bogey to overcome? Apparently, not many. Burbank and Fogarty, both doctors who have developed medical devices, note that the VC money has all but dried up in that industry, since the ObamaCare tax.

We have all marveled at the rapid advancements in medicine over our lifetimes. A significant portion is due to innovations in medical devices.  The stream of innovation in the US medical industry that has improved the well-being of the entire world is now dry.

Enjoy ObamaCare.

How many people will die in the future that would have lived had medical device innovation been allowed to proceed as in the past?

Posted By The Biz Bucks Guy
Posted in Health Care | 0 Replies

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