NY Times: Say, Getting Rid Of The Ocare Medical Device Tax Is A Bad Idea

by William Teach | January 30, 2015 7:03 am

In Liberal World, getting rid of any tax is a bad idea. This comes our way via the extremely well paid people who sit on the low diversity Editorial Board

No Case for Killing the Medical Device Tax[1]

In seeking to dismantle the Affordable Care Act piece by piece, congressional Republicans have placed a high priority on repealing a tax on medical devices that would raise some $29 billion over the next 10 years to help ensure that health reform will not increase the deficit. Repealing the tax is a terrible idea that has been given a veneer of respectability by support from liberal Democrats in states with large concentrations of device manufacturers. They include Senator Elizabeth Warren of Massachusetts, Senators Amy Klobuchar and Al Franken of Minnesota and Representative Ron Kind of Wisconsin, among others. President Obama ought to veto any bill that eliminates the tax.

I can think of one reason right off the bat: the costs of imposing the tax will primarily hurt low and middle class Americans, unlike those who get paid very well at the NY Times.

The health reform law imposes a modest 2.3 percent tax on sales of medical devices, to be paid by the manufacturers or importers. It applies to such products as X-ray machines, M.R.I. scanners, pacemakers and artificial hip and knee joints but not to eyeglasses, contact lenses and hearing aids. The $29 billion to be raised from the device industry is less than the amounts to be raised from insurers and drug companies, all of which will benefit from increased business under the act and should pay their fair shares of the cost. If the lost revenues from a repeal of the device tax are offset by reduced spending on other health care programs, as they might well be, many patients could suffer medical or financial harm.

Fair share, huh? The extra costs will be passed on to consumers in some form or fashion.

Some parts of the industry are thriving. In Warsaw, Ind., which bills itself as the “Orthopedic Capital of the World,” demand for artificial hips and knees and other orthopedic devices appears to be growing and companies are scrambling to hire more people.

“Some.” And any extra taxes on the devices increase the cost of the devices. Most taxes and “fees” tend to harm the lower and middle class American citizens. There is bipartisan support for repeal, including Nancy Pelosi. And it is doing harm[2] to medical businesses, despite what is claimed in the editorial.

I bet if the tax was changed to, say, a 2.3% tax on sales of newspapers, which would be paid by the newspaper, you can bet that the Times would be against it in a heartbeat.

Crossed at Pirate’s Cove[3]. Follow me on Twitter @WilliamTeach[4].

  1. No Case for Killing the Medical Device Tax: http://www.nytimes.com/2015/01/30/opinion/no-case-for-killing-the-medical-device-tax.html?ref=opinion&_r=0
  2. is doing harm: http://www.forbes.com/sites/theapothecary/2014/08/01/repealing-the-medical-device-excise-tax-next-steps/
  3. Pirate’s Cove: http://www.thepiratescove.us/
  4. @WilliamTeach: http://twitter.com/WilliamTeach

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