Barack Obama - The Great Outsourcer
One key reason is the new medical device manufacturer’s tax — one of the 20 new or higher taxes in “Obamacare.” Simply put, the medical device tax will be disastrous for U.S. employers and workers trying to make it in one of the world’s most dynamic and competitive industries. As is the case with the current sugar regime, this new tax will result in outmigration of jobs.
The medical device tax, a 2.3 percent tax imposed on gross receipts, will not only result in the elimination of U.S. jobs, it is already causing manufacturers to move to other countries that don’t impose such foolish policies.
Covidien Plc, a medical device manufacturer, announced last year that it will lay off 200 U.S. workers and plans to move operations to Costa Rica and Mexico in response to this tax. It’s not due to lack of patriotism — as some partisan Obama campaign spokesmen may allege. Instead, this is a rational response to the anti-growth policies imposed by a politically, rather than economically-focused White House.
Stryker, a medical device maker based in Kalamazoo, M0, announced just last fall its plans to layoff 1,000 workers to compensate for this new tax. This is just one example of the job-killing and outsourcing impact of the medical device tax. According to a 2011 study by the Hudson Institute, the medical device tax will result in the loss of over 45,000 jobs across the entire industry.
Even Massachusetts Senate candidate Elizabeth Warren recognizes the job-destroying effects of the medical device tax. She wrote in a recent op-ed that it “disproportionately impacts the small companies with the narrowest financial margins and the broadest innovative potential. It also pushes companies of all sizes to cut back on research and development for life-saving product.”
The medical device manufacturing industry supports more than 422,000 jobs across the U.S. These are well-paying jobs. Workers in the medical device industry earn over 39 percent more than the average U.S. worker.
Any economist worth their salt, regardless of political affiliation or ideology, will concede that a gross receipts tax is one of the most economically adverse forms of taxation. Yet that is just what Obama and congressional Democrats thought wise to impose on medical device manufacturers in this anemic and uncertain economy. The result is less of those high-paying jobs here and more of them abroad.