Cook Medical Scraps Expansion Plans Over ObamaCare Medical Tax

The Democrats who wrote, passed, and support the “American Care Act” probably thought that companies would just roll over and willingly pay a higher tax rate for their medical devices. Alas, the Real World has intruded on the Dem fantasies of collecting more tax money to spread around to their campaign contributors and voters

(Fox News) An Indiana-based medical equipment manufacturer says it’s scrapping plans to open five new plants in the coming years because of a looming tax tied to President Obama’s health care overhaul law.

Cook Medical claims the tax on medical devices, set to take effect next year, will cost the company roughly $20 million a year, cutting into money that would otherwise go toward expanding into new facilities over the next five years.

“This is the equivalent of about a plant a year that we’re not going to be able to build,” a company spokesman told

He said the original plan was to build factories in “hard-pressed” Midwestern communities, each employing up to 300 people. But those factories cost roughly the same amount as the projected cost of the new tax.

“In reality, we’re not looking at the U.S. to build factories anymore as long as this tax is in place. We can’t, to be competitive,” he said.

Surprise! Who could imagine that increasing taxes could cause a company to change its behavior rather than rolling over in docility? Liberals might say that a 2.3% tax on medical devices isn’t a big deal, but when that increases costs on a company by $20 million dollars, which is real money when you get outside the Washington, D.C. bubble, things have to be changed. And that cost also tends to be passed on to the consumer, who might think twice about making the purchase, and go with that product that was made in another country and is not subject to the tax.

But the Cook Medical spokesman said the impact is greater than just a 2.3 percent uptick in taxes. He said the impact on actual earnings is another 15 percent, and he projected the company’s total tax burden next year will rise to over 50 percent.

Wouldn’t it make more sense to decrease taxes, meaning people would purchase that product in greater numbers, a product made in America by (hopefully) American workers, so that the company can make more money, which means more tax money is paid to the state and local governments through sales tax and, because earnings are greater, more income tax to the state and federal governments? In Liberal World, they’d just prefer the money goes straight to the federal coffers, and damned the consequences.

And let’s not forget that with more sales, there would be a need for more production, so the companies would expand, people would work. Oh, and it means people would pay less for the medical devices they need, devices that may just be better quality than those imported.

Crossed at Pirate’s Cove. Follow me on Twitter @WilliamTeach.

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