Medical-device manufacturer to lay off 1400 …

posted at 2:05 pm on July 29, 2011 by Ed Morrissey

In March 2010, Nancy Pelosi warned us that we had to pass ObamaCare to “find out what’s in it.”  What is in it is jobs for China.  What’s not in it is jobs for Americans, as the Boston Globe reports today (via NewsAlert):

Boston Scientific Corp. said yesterday that it plans to eliminate 1,200 to 1,400 jobs worldwide during the next 2 1/2 years to free money for new investments, the Natick medical device maker’s second major round of cuts since last year.

The company would not say how many jobs will be lost in Massachusetts, where fewer than 2,000 of its 25,000 employees are based. In February 2010, Boston Scientific said it would pare 1,300 jobs worldwide, but similarly did not say where.

Yesterday’s move, a day after Boston Scientific disclosed it was investing $150 million and hiring 1,000 people in China, raised fears that the company will gradually shift more work to foreign sites with less government oversight and lower costs than the United States.

Massachusetts state Senator James Elridge (D-Acton) reacted … predictably:

“My sense is, sadly, that like many other American companies, they are shedding jobs in Massachusetts and adding jobs overseas,’’ Eldridge said. “And this is a company making greater profits, so it’s even more outrageous.’’

Yes, that’s what happens when the American government makes it more expensive to do business in the US.  And that’s exactly what ObamaCare did, especially with medical-device manufacturers like Boston Scientific.  Fourteen months ago, those manufacturers warned that they would have to cut costs in the US as a consequence of the new taxes imposed on their sales:

Massachusetts medical-device companies say they’ll cut back on operational costs – and jobs – after a planned 2.3 percent tax on their products is implemented in 2013, according to a new survey.

The Massachusetts Medical Device Industry Council, which held its annual meeting yesterday in Boston, said about 90 percent of the 100 medical-device firms said they would reduce costs due to the new tax tucked into the recently passed health-care reform bill.

It’s not as if Boston Scientific didn’t try to warn people about the problem, either.  Less than two weeks ago, they joined hundreds of other medical-device manufacturers to plead for a repeal of the tax:

More than 420 companies including Boston Scientific, St. Jude Medical and Stryker signed on to a letter asking the U.S. Congress to repeal a planned 2.3 percent excise tax on medical devices. The tax could cost $20 billion a year and is set to take effect in 2013 as part of broad health care reform package passed last year.

“The tax is already having an adverse impact on R&D investment and job creation, jeopardizing the U.S. global leadership position in medical device innovation,” said the letter.

“If this tax is not repealed, it will continue to force affected companies to consider cutting manufacturing operations, research and development, and employment levels to recoup the lost earnings due to the tax,” it said. “It will also adversely impact patient access to new and innovative medical technologies,” it added.

“The medical device excise tax is a serious burden for companies struggling to maintain America’s global leadership in the development of medical technology,” said Stephen J. Ubl, president and CEO of the Advanced Medical Technology Association (AdvaMed), a medtech lobbying group that drafted the letter.

The tax wasn’t the only problem in the bill, either, as I wrote at the time:

Taxes on companies aren’t ultimately paid by business entities.  They get paid by the consumer in the long run.  In order to save costs, these device manufacturers will either have to lay off employees or cut back on innovative research — and likely both.  The end result will be higher prices, lower support, and less innovation to meet medical needs of consumers.

That’s not the only problem facing the industry, either.  They now have to provide an accounting for their marketing efforts among physicians, thanks to a new “sunshine bill” that requires full disclosure of any marketing directed at physicians.  That will escalate internal costs, putting even more pressure on device makers to cut elsewhere or raise prices, or both.

The jobs will move overseas mainly to meet demand overseas.  But we could have kept the jobs and sales here, had it not been for the increasing regulatory and tax policies of the Obama administration, starting with — but hardly ending with — ObamaCare.

Update: I changed the headline, because as TNeloms points out in the comments, not all of the closed jobs are in the US.  However, given the reaction of Democrats in Massachusetts, it’s looking like a good chunk of them will be.

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Comment pages: 1 2

Hope and change, Baby, hope and change!!!!!

Cindy Munford on July 29, 2011 at 2:07 PM

Let’s also not forget that “medical device” has a very liberal definition in Congress.

For instance, didn’t the tax originally cover the manufacture and sale of tampons and contact lenses?

teke184 on July 29, 2011 at 2:09 PM

Medical-device manufacturer to lay off 1400 in the US …

This is a DIRECT RESULT OF OBAMACARE…which will bury any medical device manufacturer under mountains of red tape and mandates.

landlines on July 29, 2011 at 2:10 PM

Democrats are evil.

MTF on July 29, 2011 at 2:11 PM

Medical-device manufacturer to lay off 1400 in the US …

Are the jobs really coming from the US? The article says worldwide, and that it’s not clear where the jobs are coming from:

Boston Scientific Corp. said yesterday that it plans to eliminate 1,200 to 1,400 jobs worldwide

Also, regarding this:

Fourteen months ago, those manufacturers warned that they would have to cut costs in the US as a consequence of the new taxes imposed on their sales:

How does a sales tax lead to jobs going overseas? The sales tax is the same whether the workers are employed in the US or China. I don’t see how the two are related. The point simply seems to be that the sales tax may stunt growth in general, not that it will cause jobs to move overseas.

tneloms on July 29, 2011 at 2:11 PM

Things just keep getting better and better…

ladyingray on July 29, 2011 at 2:11 PM

Goodbye quality medical devices.

Hello Lead filled, defective medical devices!

portlandon on July 29, 2011 at 2:12 PM

GObama!

John Deaux on July 29, 2011 at 2:13 PM

“We have to pass it in order to find out what’s in it.”

flytier on July 29, 2011 at 2:14 PM

The legacy of the democrats: Regulate and tax until businesses flee the US in droves.

Of course their unions buddies have had a big hand in that as well.

darwin on July 29, 2011 at 2:14 PM

tneloms on July 29, 2011 at 2:11 PM

Manufacturing taxes are horrendous, about 40% and overseas they are a pittance, comparably.

Schadenfreude on July 29, 2011 at 2:14 PM

Just following the lead of Jeff Imelt and GE.

honsy on July 29, 2011 at 2:15 PM

Obongo is nothing short of a marauding invader, raping every village along the way. And that’s a lot less hyperbole than Nazi Pelosi saying that Democrats have to save the earth from evil Republicans.

Neal Boortz said it well: To a Conservative American, money is something you earn and save. To a liberal, money is just something that happens when you fill out forms which will force other people to mail it to you.

Would love to see how much cash Boston Scientific shelled out to Team Dope in 2008.

Western_Civ on July 29, 2011 at 2:15 PM

I had lunch yesterday with a pharmaceutical executive. He tells a stunning tale about neglect, blatant politicization, and malfeasance at the FDA in the era of Obama.

flyfisher on July 29, 2011 at 2:15 PM

The fools at BS supported ObamaCare, along with the other pharmaceutical and medical device idiots at the top.

Schadenfreude on July 29, 2011 at 2:15 PM

Patient Protection and Affordable Care Act sure is evolving quite nicely.
Soon only Corporate Jet owners will be the only to afford it.

Thank you President Obama.

Electrongod on July 29, 2011 at 2:16 PM

Just following the lead of Jeff Imelt and GE.

honsy on July 29, 2011 at 2:15 PM

He s/b fired from his CEO or advisor to Obama job, as he is in direct conflict of interest. Thugs and lawlessness rules the land now.

Schadenfreude on July 29, 2011 at 2:16 PM

payback’s a bitch, nitwits.
Enjoy your Socialism.

james23 on July 29, 2011 at 2:17 PM

Manufacturing taxes are horrendous, about 40% and overseas they are a pittance, comparably.

Schadenfreude on July 29, 2011 at 2:14 PM

I don’t see any mention of an increase in manufacturing taxes here. They’re talking about sales taxes on the devices themselves. Do you agree the sales tax increase shouldn’t have an effect on jobs going overseas? And has there been any increase in manufacturing taxes that is leading to the job exodus?

tneloms on July 29, 2011 at 2:17 PM

Also don’t forget the monstrosity that is the FDA, which has all but killed off drug development in the U.S.

Outlander on July 29, 2011 at 2:17 PM

Guess what? This is a feature, not a bug, of Obamacare. Just another example of “progressive” policy. These idiots think that an “arms race” in medical devices is actually one of the big drivers of health care costs. There were a bunch of articles about this as the bill was being written. This industry was very specifically targeted by the Left.

Even if they are right, which they aren’t, just slapping a tax on them doesn’t change the way doctors or hospitals use them, it just raises the price for them which will be passed on to the patient.

rockmom on July 29, 2011 at 2:18 PM

had lunch yesterday with a pharmaceutical executive. He tells a stunning tale about neglect, blatant politicization, and malfeasance at the FDA in the era of Obama.

flyfisher on July 29, 2011 at 2:15 PM

I used to work for Boston Scientific and boy could I tell you some stories about the FDA from my dealings with them and some of their people. Corrupt, corrupt, corrupt.

Shame to see this many jobs eliminated, but I’m also curious to see how many of these are US based and not from the international divisions.

BakerAllie on July 29, 2011 at 2:18 PM

I so despise this administration.

ctmom on July 29, 2011 at 2:20 PM

I had lunch yesterday with a pharmaceutical executive. He tells a stunning tale about neglect, blatant politicization, and malfeasance at the FDA in the era of Obama.

flyfisher on July 29, 2011 at 2:15 PM

I live in the heart of Pharma-land and I am hearing similar stories. Merck just announced a big layoff.

rockmom on July 29, 2011 at 2:20 PM

Update: I changed the headline, because as TNeloms points out in the comments, not all of the closed jobs are in the US. However, given the reaction of Democrats in Massachusetts, it’s looking like a good chunk of them will be.

Thanks :).

tneloms on July 29, 2011 at 2:22 PM

tneloms on July 29, 2011 at 2:17 PM

Two things

1. All your babble doesn’t matter in the details. Overall the taxes are high in the U.S. and lower in the rest of the world, for shame. Corporate tax rates are now higher in the U.S. than in Japan.

2. Don’t believe everything Boston or any of the bigs claim. They supported the fool in the WH, with his Obamacare, along with the pharmaceutical and other charlatans. They are complicit with Obama and his carnival.

Schadenfreude on July 29, 2011 at 2:22 PM

Tell me again why Boehner wants to cut a deal with the Democrats…?

… Oh, that’s right. They throw really kewl cocktail parties.

/

Seven Percent Solution on July 29, 2011 at 2:23 PM

tneloms, maybe “babble” was the wrong word. No harm meant. My peeve is not with you.

Also, the regulations in the U.S. are dour, compared to the rest of the world. They are way smarter and always will blame the U.S. Our multi-culti, ‘sensitive’ fools on the left will fall for it and accommodate all others, at our cost.

Schadenfreude on July 29, 2011 at 2:24 PM

I don’t see any mention of an increase in manufacturing taxes here. They’re talking about sales taxes on the devices themselves. ***

tneloms on July 29, 2011 at 2:17 PM

Pricing for medical devices is fairly rigid; it’s set principally through reimbursement regimes established by the government (Medicare, Medicaid) and private insurance. Medical device manufacturers therefore have a limited ability to pass the tax along to consumers, meaning the tax eats into profit. That, in turn, makes manufacturers more likely to ship jobs overseas to lower costs and preserve margin.

Outlander on July 29, 2011 at 2:24 PM

States raise fines, money paid to the government, for speeding in a construction so there would be less speeders.

Democrats raise fines\taxes on companies so…

WashJeff on July 29, 2011 at 2:25 PM

Don’t forget that Obama will spin that he is “for the American workers”.

Send him out with ‘pitchforks’.

Schadenfreude on July 29, 2011 at 2:25 PM

希望和變化 (hope and change)

Bruce MacMahon on July 29, 2011 at 2:27 PM

If free trade means companies move jobs to China, so that Americans can buy cheaper medical instruments, then you can take free trade and shove it. Ultimately, almost all manufacturing jobs could be moved to China by that metric.

Then what is left? Service jobs? Fast food, lawn maintenance, janitorial? They’re going to Hispanics.

What else is there?

Lawyers?

Community organizers?

Politicians?

I mean, really, who is going to be left to actually do productive work?

America’s wealth was created by its manufacturing base.

keep the change on July 29, 2011 at 2:27 PM

This from the department of Utterly Predictable.

dczombie on July 29, 2011 at 2:27 PM

It’s not just Obamacare… it’s Junk Justice.

A lot of manufacturing jobs went overseas because companies can’t afford to fork over ten million every time a union employees trips and falls over his own shadow.

viking01 on July 29, 2011 at 2:27 PM

The point simply seems to be that the sales tax may stunt growth in general, not that it will cause jobs to move overseas.

tneloms on July 29, 2011 at 2:11 PM

Punish an activity you get less of it.

Why is every incremental screwing of the Achiever’s in this country treated like it’s an isolated incident?

Just a sales tax increase here and a income tax surcharge there and a property tax doubling there and higher capital gains taxes over there…

Chip on July 29, 2011 at 2:27 PM

Two things

1. All your babble doesn’t matter in the details. Overall the taxes are high in the U.S. and lower in the rest of the world, for shame. Corporate tax rates are now higher in the U.S. than in Japan.

Schadenfreude on July 29, 2011 at 2:22 PM

This post is about how ObamaCare is leading a medical device manufacturer to ship jobs overseas, specifically due to an increased sales tax. I just don’t see how those two are connected.

Corporate tax rates do encourage companies to go abroad, but that has nothing to do with ObamaCare, or even Obama. In fact, Obama has supported cutting the corporate tax rate, which hasn’t been changed in 25 years.

tneloms on July 29, 2011 at 2:28 PM

Corporate tax rates do encourage companies to go abroad, but that has nothing to do with ObamaCare, or even Obama

tneloms on July 29, 2011 at 2:28 PM

Hmmmm could it be the National Socialist Democrat’s profligate spending habits?

Their obsession to redistribute wealth?

Could that have anything to do with it?

Chip on July 29, 2011 at 2:33 PM

tneloms, maybe “babble” was the wrong word. No harm meant. My peeve is not with you.

Schadenfreude on July 29, 2011 at 2:24 PM

No problem. By the way, I agree that corporate taxes should be lowered, but in general I don’t think jobs being shipped overseas is a problem. I’m a strong proponent of free trade, as is pretty much every economist on both sides of the spectrum, because the efficiency gained from hiring cheaper labor ends up yielding a roughly equal amount of new jobs domestically. This is true both theoretically and in practice (historically).

tneloms on July 29, 2011 at 2:33 PM

Even after Obongocare was signed, Boston Scientific continued to lavish support on Demoncrats, most of whom pushed the crap sandwich down our throats:

House
Altmire, Jason (D-PA) $2,500
Barrow, John (D-GA) $4,000
Bean, Melissa (D-IL) $1,000
Becerra, Xavier (D-CA) $7,000
Boyd, Allen (D-FL) $1,000
Butterfield, G K (D-NC) $1,000
Capps, Lois (D-CA) $2,000
Capuano, Michael E (D-MA) $2,500
Christian-Christensen, Donna (D-VI) $1,000
Crowley, Joseph (D-NY) $2,000
Davis, Danny K (D-IL) $2,500
Dingell, John D (D-MI) $2,000
Driehaus, Steve (D-OH) $1,000
Eshoo, Anna (D-CA) $3,000
Etheridge, Bob (D-NC) $3,000
Hill, Baron (D-IN) $4,000
Honda, Mike (D-CA) $2,000
Hoyer, Steny H (D-MD) $2,500
Inslee, Jay R (D-WA) $1,000
Kind, Ron (D-WI) $5,000
Langevin, Jim (D-RI) $1,000
Larson, John B (D-CT) $1,000
Lee, Barbara (D-CA) $2,500
Lynch, Stephen F (D-MA) $1,000
Maffei, Dan (D-NY) $1,500
Markey, Edward J (D-MA) $1,000
Matheson, Jim (D-UT) $10,000
McCollum, Betty (D-MN) $500
McGovern, James P (D-MA) $2,500
Murphy, Christopher S (D-CT) $2,000
Murphy, Scott (D-NY) $2,000
Neal, Richard E (D-MA) $2,000
Pallone, Frank Jr (D-NJ) $1,000
Pomeroy, Earl (D-ND) $1,000
Sanchez, Linda (D-CA) $2,000
Schrader, Kurt (D-OR) $2,000
Schwartz, Allyson (D-PA) $1,000
Space, Zachary T (D-OH) $3,000
Speier, Jackie (D-CA) $500
Thompson, Mike (D-CA) $4,000
Towns, Edolphus (D-NY) $2,000
Walz, Timothy J (D-MN) $1,000

Senate
Bayh, Evan (D-IN) $2,500
Brown, Sherrod (D-OH)$1,000
Coakley, Martha (D-MA)$5,000
Conrad, Kent (D-ND)$2,000
Dodd, Chris (D-CT)$2,500
Ellsworth, Brad (D-IN)$5,000
Feinstein, Dianne (D-CA)$1,500
Franken, Al (D-MN)$2,500
Gillibrand, Kirsten (D-NY)$1,000
Klobuchar, Amy (D-MN)$4,500
Lincoln, Blanche (D-AR)$1,000
Meek, Kendrick B (D-FL)$2,000
Mikulski, Barbara A (D-MD)$3,000
Murkowski, Lisa (I-AK)$3,000
Murray, Patty (D-WA)$1,000
Nelson, Ben (D-NE)$3,000
Nelson, Bill (D-FL)$1,000
Source: http://www.opensecrets.org/pacs/pacgot.php?cmte=C00357863&cycle=2010

Western_Civ on July 29, 2011 at 2:34 PM

Would love to see how much cash Boston Scientific shelled out to Team Dope in 2008.

Western_Civ on July 29, 2011 at 2:15 PM

Opensecrets.org says $25,888 given by employees to Obama, $33,100 given to McCain.

John Deaux on July 29, 2011 at 2:34 PM

tneloms, Obama has done nothing tax wise or regulations wise to encourage anyone to mfg. a thing in the U.S. Obamacare is a disaster on any corporation.

On the other hand, corporations will use any of this and move on. They have no incentives to stay and many to go.

He, Obama, and they, play politics, often together, always against the taxpayers. The U.S. is the big loser because Obama doesn’t care about the U.S. or anyone else, only about himself. Corporations do what they’re supposed to do, increase value of shares.

Schadenfreude on July 29, 2011 at 2:36 PM

Right in Barney Frank’s back yard.

Way to go MassTax-achusetts!

Mangy Scot on July 29, 2011 at 2:36 PM

Western_Civ on July 29, 2011 at 2:34 PM

Thank you. You provided definitive proof of how hypocritical Boston and Obama et co. are.

Schadenfreude on July 29, 2011 at 2:37 PM

Pricing for medical devices is fairly rigid; it’s set principally through reimbursement regimes established by the government (Medicare, Medicaid) and private insurance. Medical device manufacturers therefore have a limited ability to pass the tax along to consumers, meaning the tax eats into profit. That, in turn, makes manufacturers more likely to ship jobs overseas to lower costs and preserve margin.

I work for Boston Scientific and this is exactly correct. We don’t sell consumer products, we sell products at a negotiated price and don’t get to change it based on our costs. The added tax cost us these jobs.

brilrodion on July 29, 2011 at 2:37 PM

Pricing for medical devices is fairly rigid; it’s set principally through reimbursement regimes established by the government (Medicare, Medicaid) and private insurance. Medical device manufacturers therefore have a limited ability to pass the tax along to consumers, meaning the tax eats into profit. That, in turn, makes manufacturers more likely to ship jobs overseas to lower costs and preserve margin.

Outlander on July 29, 2011 at 2:24 PM

It’s true that those taxes eat into profit, but if they can save money by going overseas, why wouldn’t they do it anyway even if they hadn’t lost the profit due to sales tax? Any profit seeking company would make that decision independent of sales tax. I think the issue is simply cheaper labor and corporate taxes.

tneloms on July 29, 2011 at 2:38 PM

Medical-device manufacturer to lay off 1400 …

Paul Krugman is busy writing a column to tell us this isn’t really happening and that the media should stop reporting it.

As for any honest person with an IQ above room temperature, this is one of the most predictable stories of the year.

RadClown on July 29, 2011 at 2:39 PM

Don’t lose track of the fact that Obama has no interest in U.S. jobs.

He has a plan, and it’s proceeding accordingly. He will not be rewarded. He believes the land to be way more foolish than she already is.

Schadenfreude on July 29, 2011 at 2:39 PM

Fourteen months ago, those manufacturers warned that they would have to cut costs in the US as a consequence of the new taxes imposed on their sales:

Its not just the taxes. I read the bill. Device manufacturers have a raft of new regulations, forms and procedural hoops to jump through that add a great deal to their EXPENSE.

Plus changes to the insurances they provide to their employees.

tneloms on July 29, 2011 at 2:28 PM

It’s not a sales tax as you nay understand it. In this case its an inaccurate word choice. The new tax is an increase on the tax they pay on their revenue. This is stipulated in the bill.

Sales taxes are paid by customers, income or revenue taxes are paid by the seller/producer.

dogsoldier on July 29, 2011 at 2:39 PM

“And this is a company making greater profits, so it’s even more outrageous.’’

Those profits go to our 401(k) plans, Bub. We want corporations to make profits.

obladioblada on July 29, 2011 at 2:39 PM

In March, 2010, I wrote specifically about Boston Scientific’s initial reaction to Obamacare.

This wasn’t just predictable. It was expected.

LFRGary on July 29, 2011 at 2:40 PM

tneloms on July 29, 2011 at 2:38 PM

Yes, as I explained here

Schadenfreude on July 29, 2011 at 2:36 PM

Schadenfreude on July 29, 2011 at 2:40 PM

How dumb do you have to be to think that taxing a particular thing is going to help reduce the cost of that thing to consumers?

Count to 10 on July 29, 2011 at 2:40 PM

tneloms on July 29, 2011 at 2:28 PM

Then you obviously aren’t reading the replies to your comments.

blink on July 29, 2011 at 2:37 PM

It’s the common tactic of ignoring comments and questions that challenge her world view.

Chip on July 29, 2011 at 2:41 PM

It’s not a sales tax as you nay understand it. In this case its an inaccurate word choice. The new tax is an increase on the tax they pay on their revenue. This is stipulated in the bill.

Sales taxes are paid by customers, income or revenue taxes are paid by the seller/producer.

dogsoldier on July 29, 2011 at 2:39 PM

But either way, doesn’t this tax apply whether the jobs are here or overseas?

tneloms on July 29, 2011 at 2:42 PM

As for any honest person with an IQ above room temperature, this is one of the most predictable stories of the year.

RadClown on July 29, 2011 at 2:39 PM

Multiplied by the thousans, becaue Obama makes it easy for them, while they stuff his pockets.

He is for globalization, one-world, make us all equally mediocre and poor, while he and his live like billionaires. Open yer eyes. He has absolutely Nothing against jets. It’s all yakety-yak.

Schadenfreude on July 29, 2011 at 2:42 PM

But either way, doesn’t this tax apply whether the jobs are here or overseas?

tneloms on July 29, 2011 at 2:42 PM

People fail to see that you are right. Because you don’t reveal what your angle of argument is, they can’t agree with you.

Schadenfreude on July 29, 2011 at 2:43 PM

I had lunch yesterday with a pharmaceutical executive. He tells a stunning tale about neglect, blatant politicization, and malfeasance at the FDA in the era of Obama.

flyfisher on July 29, 2011 at 2:15 PM

Also at DOJ, ATF……

Del Dolemonte on July 29, 2011 at 2:44 PM

Failbama is destroying our country bit by bit.

ObamunistCare causes layoffs as illustrated above,

ObamunistCare Blocks companies from growing, which causes them not to hire new people.

He wants to raise taxes during a time when we have more unemployed than at any time in the country’s history, which will act to depress it further.

dogsoldier on July 29, 2011 at 2:45 PM

It’s true that those taxes eat into profit, but if they can save money by going overseas, why wouldn’t they do it anyway even if they hadn’t lost the profit due to sales tax? Any profit seeking company would make that decision independent of sales tax. I think the issue is simply cheaper labor and corporate taxes.
tneloms on July 29, 2011 at 2:38 PM

Because it isn’t cheaper to move production over there until we raise the cost of doing business here. All costs have to be considered.

Count to 10 on July 29, 2011 at 2:45 PM

Obama can not win with just the downtrodden fools/lambs voting for him. He miscalculates in a big way in his crises generation ideology.

Schadenfreude on July 29, 2011 at 2:46 PM

Corporate tax rates do encourage companies to go abroad, but that has nothing to do with ObamaCare, or even Obama. In fact, Obama has supported cutting the corporate tax rate, which hasn’t been changed in 25 years.

Jay Carney on July 29, 2011 at 2:28 PM

Fixed.

Del Dolemonte on July 29, 2011 at 2:46 PM

How dumb do you have to be to think that taxing a particular thing is going to help reduce the cost of that thing to consumers?

Count to 10 on July 29, 2011 at 2:40 PM

I would say that’s typical Leftist thinking, but that would be a contradiction in terms.

Leftist think that corporate revenues come from somewhere else other than from the products they sell.

So they are shocked – shocked I tells ya – that an increase in sales taxes or any other taxes will be reflected in the cost of a product.

Chip on July 29, 2011 at 2:46 PM

Because it isn’t cheaper to move production over there until we raise the cost of doing business here. All costs have to be considered.

Count to 10 on July 29, 2011 at 2:45 PM

There are incentives to go and none to stay.

Schadenfreude on July 29, 2011 at 2:47 PM

But either way, doesn’t this tax apply whether the jobs are here or overseas?

tneloms on July 29, 2011 at 2:42 PM

To offset the tax, the company may move its headquarters or hire third world employees who work for a dollar a day.

They may completely move their manufacturing overseas where they have a much lower tax structure. The bean counters show the executives the bottom line and they leave.

dogsoldier on July 29, 2011 at 2:48 PM

I would say that’s typical Leftist thinking, but that would be a contradiction in terms.

Chip on July 29, 2011 at 2:46 PM

Its an oxymoron. Mutually exclusive asynonymous terms.

dogsoldier on July 29, 2011 at 2:50 PM

Del Dolemonte on July 29, 2011 at 2:46 PM

Jay apparently didnt read the bill.

dogsoldier on July 29, 2011 at 2:52 PM

Then you obviously aren’t reading the replies to your comments.

blink on July 29, 2011 at 2:37 PM

It’s the common tactic of ignoring comments and questions that challenge her world view.

Chip on July 29, 2011 at 2:41 PM

I’ve been reading and replying to these comments. I agree that there are plenty of incentives for companies to move abroad, I just think that these incentives exist completely independently of the sales tax (or whatever it should be called) mentioned here.

tneloms on July 29, 2011 at 2:53 PM

And about four days ago, GE announced that Jim Taggart …. excuse me…. Jeffrey Immelt is moving GE’s Medical Imaging business to China.

LegendHasIt on July 29, 2011 at 2:53 PM

But but…think of all the good will we’re creating-in China!

MaiDee on July 29, 2011 at 2:54 PM

To offset the tax, the company may move its headquarters or hire third world employees who work for a dollar a day.

dogsoldier on July 29, 2011 at 2:48 PM

I don’t think it works that way. There’s nothing that says a company has to earn a profit $X, and then only when it loses $Y of that profit due to a sales tax it needs to move abroad to recoup that $Y so that it’s once again earning $X. If a company can gain $Y by moving abroad, then it will be happy to earn $X+Y. The sales tax shouldn’t affect its decision to move abroad.

tneloms on July 29, 2011 at 2:55 PM

As more and more device company’s leave the US that means along with the sure fire death panels we will have body part panels.What could go wrong?

docflash on July 29, 2011 at 2:55 PM

Because it isn’t cheaper to move production over there until we raise the cost of doing business here. All costs have to be considered.

Count to 10 on July 29, 2011 at 2:45 PM

The sales tax doesn’t raise the cost of doing business here. That has to do with manufacturing and corporate taxes, which are unrelated.

tneloms on July 29, 2011 at 2:56 PM

People fail to see that you are right. Because you don’t reveal what your angle of argument is, they can’t agree with you.

Schadenfreude on July 29, 2011 at 2:43 PM

I think you’re not being sarcastic and are actually being serious here, in which case I agree. I’ve noticed that happens a lot. I’m just trying to discuss the issues in the post, not push a particular angle.

tneloms on July 29, 2011 at 2:58 PM

Barry’s plan is working exactly as he intended it to work.
Sadly, I don’t think people will wake up until we are somewhere between Venezuela and Somalia.

lonestar1 on July 29, 2011 at 2:59 PM

Then you obviously aren’t reading the replies to your comments.

blink on July 29, 2011 at 2:37 PM

It’s the common tactic of ignoring comments and questions that challenge her world view.

Chip on July 29, 2011 at 2:41 PM

I’ve been reading and replying to these comments. I agree that there are plenty of incentives for companies to move abroad, I just think that these incentives exist completely independently of the sales tax (or whatever it should be called) mentioned here.

tneloms on July 29, 2011 at 2:53 PM

Sure you have.
You said:

these incentives exist completely independently of the sales tax

Let me ‘Splain something to you, sales taxes, income taxes, property taxes, fees, surcharges, fees on income tax surcharges, capital gains taxes, etc, etc…..

All of these taxes are all costs to a business; all of these costs have a deleterious effect on businesse’s bottom line.

And it’s management’s job to minimize these costs – no matter the source or language meant to disguise these taxes as such – in order for a business to make, OH oh no! a profit, so as to stay in business and pay all those wonderful taxes.

Chip on July 29, 2011 at 3:04 PM

And GE is moving the GE Healthcare, the world’s biggest maker of medical-imaging machines, x-ray unit headquarters to Beijing. The company plans to invest $2bn across China and hire several hundred engineers. It reportedly is making the move in order to “tap into Chinese growth.”

Is anyone, anyone at all, in Washington paying attention to this stuff?? We’ve gone down this excise tax route many times. It’s often been a disaster. If I remember correctly (please correct me if I’m wrong), Rhode Island wasn’t going to ratify the Constitution until it was informed its goods sold in the United States would be subject to excise taxes.

When Jeffrey Immelt, head of Obama’s Jobs Council, badgered American businesses to stop complaining about the government and start hiring, did he mean they should hire people in China like he’s doing?

SukieTawdry on July 29, 2011 at 3:05 PM

But either way, doesn’t this tax apply whether the jobs are here or overseas?

tneloms on July 29, 2011 at 2:42 PM

It does because the tax applies to the total revenues of the company regardless of profit. However, that means incentives are now more tilted towards reducing expenses rather than increasing revenue in order to maintain profits. That’s what is happening here.

RadClown on July 29, 2011 at 3:05 PM

And about four days ago, GE announced that Jim Taggart …. excuse me…. Jeffrey Immelt is moving GE’s Medical Imaging business to China.

LegendHasIt on July 29, 2011 at 2:53 PM

Indeed. I posted on another thread, just a tad ago, that Immelt should resing either his CEO or Obama-advisor post, as he is in direct conflict on interest. Alas, thugs rule the land and benefit from it, corporate and political thugs, that is…

——-
tneloms, not being sarcastic, this time :)

Schadenfreude on July 29, 2011 at 3:07 PM

Legend, I should have said that corporate and political thugs are in bed together.

Schadenfreude on July 29, 2011 at 3:07 PM

When Jeffrey Immelt, head of Obama’s Jobs Council, badgered American businesses to stop complaining about the government and start hiring, did he mean they should hire people in China like he’s doing?

SukieTawdry on July 29, 2011 at 3:05 PM

Legend beat you by a tad :)

However, you are right and Immelt and Obama should suffocate, in pain.

Schadenfreude on July 29, 2011 at 3:09 PM

One of the progs’ objectives is the de-industrialization of America, and this appears to help that right along. It’s a win for him whether he gets his income redistribution through the taxes, or deindustrializes our nation when the victims leave.

slickwillie2001 on July 29, 2011 at 3:11 PM


’’ Eldridge said. “And this is a company making greater profits, so it’s even more outrageous.’’


oh really

http://finance.yahoo.com/q/is?s=BSX+Income+Statement&annual

theblacksheepwasright on July 29, 2011 at 3:14 PM

SEND IN THE CLOWNS

On CNBC this morning they grilled a Tea Party Congressman for destroying our economy.

The best was Cramer asking what he was to tell callers who couldn’t afford college for their kids or retirement for themselves because of the debt impasse.

IF they follow Cramer’s investment advice, I’m shocked that they have any assets left, but putting that aside, someone should explain the phony economy we are living in. Hey caller — your stock balances are meaningless in the long run!

IRONICALLY< THERE ARE PILLARS BEHIND EVERY LEGISLATOR THE MEDIA GRABS!!! HEY CNBC, THE US ECONOMY IS AS PHONY AS THE FAMOUS GREEK PILLARS ON YOUR GOD'S DAIS. DO SOME RESEARCH! THE $14 TRILLION DOESN'T EVEN TELL THE WHOLE STORY.

IlikedAUH2O on July 29, 2011 at 3:26 PM

Too bad the headline couldn’t somehow read “Boston Scienterrific to Shed 1400 Union Jobs”. BarryO and Trumpka no doubt would cringe at that; not that they’d give a rat’s butt.

Robert17 on July 29, 2011 at 3:27 PM

Oh wow! Raising taxes on industries tends to FORCE those industries to move to friendlier locations.

Maybe someone should tell the Democrats!

Freaking fools. Hope even one of those jobs is in Taxachusettes. Maybe the NLRB will DEMAND the company stay in the US so it can later shut down due to lack of business.

GarandFan on July 29, 2011 at 3:50 PM

The progs claimed that BS and others would pay for the tax by cutting their marketing and advertising, which is what they really object to. They didn’t think that the manufacturers could instead just pull up stakes and go to China.

These do-gooders are going to kill what little is left of Amercan manufacturing. And they wonder why union membership is dropping and middle class wages are falling!

rockmom on July 29, 2011 at 3:55 PM

Freaking fools. Hope even one of those jobs is in Taxachusettes. Maybe the NLRB will DEMAND the company stay in the US so it can later shut down due to lack of business.

GarandFan on July 29, 2011 at 3:50 PM

Believe me, if we have not gotten control of the House away from Nanzi Pelosi she would have gotten Congress to pass a bill prventing any U.S. manufacturers from moving to escape regulation or taxation. And Obama would have signed it.

See Atlas Shrugged for further details.

rockmom on July 29, 2011 at 3:56 PM

I left my heart(artificial)in Bejingcisco.

Lincoln Cadillac on July 29, 2011 at 4:01 PM

How does a sales tax lead to jobs going overseas? The sales tax is the same whether the workers are employed in the US or China. I don’t see how the two are related. The point simply seems to be that the sales tax may stunt growth in general, not that it will cause jobs to move overseas.

tneloms on July 29, 2011 at 2:11 PM

Incorrect.

Let’s say labor in the US costs them 10% of sales.

Let’s say labor in China would cost them 7% of sales.

When the govt imposes a 2.3% sales tax, it’s true that it doesn’t matter where the sales are from – but what does matter is a de facto decrease in their margins by 2.3% – and the company will look to increase prices to offset that, and/or it will look to its cost structure for places to make changes and save money.

It could be a sales tax, an income tax, regulation fees, an “It’s Wednesday” tax – it doesn’t matter, the result is the same.

*Everything* this government does to jack up a company’s expenses results in higher prices, lost/relocated jobs, etc.

Furthermore, Boston Scientific may certainly be shutting off X jobs ‘worldwide’, but it’s telling, isn’t it, that the ones announced are *here* – while also announcing that they’re hiring in China? In other words, it doesn’t seem that the ‘worldwide’ jobs being lost are in China, at minimum.

Midas on July 29, 2011 at 4:04 PM

Pelosi: Where are the jobs?

China: Right here, babs. And thanks!

BobMbx on July 29, 2011 at 4:04 PM

Believe me, if we have not gotten control of the House away from Nanzi Pelosi she would have gotten Congress to pass a bill prventing any U.S. manufacturers from moving to escape regulation or taxation. And Obama would have signed it.

See Atlas Shrugged for further details.

rockmom on July 29, 2011 at 3:56 PM

“Boeing closes US operations; moves all manufacturing to China. NLRB powerless to intecede.”

BobMbx on July 29, 2011 at 4:06 PM

tneloms, I don’t believe it is correct to call the 2.3% tax on medical devices a sales tax. Sales taxes are assesed and collected by the states. This would be a tax applied by the feds with the manufacturer paying it.

bopbottle on July 29, 2011 at 4:06 PM

I am the controller for a medium-sized dental lab, and we will be seriously hampered by the new tax. Everything we make is a “Class 2 Medical Device–” crowns, bridges, dentures, implants– and so our gross sales is subject to the 2.3% tax.
2.3% of our gross represents all of our corporate officers’ salaries, all of our profit, all of our not inconsciderable charitable donations and my paycheck to boot.
Our choices are to raise prices or not meet payroll. Your dentist will pay more, so you will pay more when you sit in his chair. Higher prices will keep more people out of the dentist’s office, which will reduce sales in the industry as a whole. Less work translates into layoffs. It almost looks like a vicious cycle. Oh, wait, it is.

King Turnup on July 29, 2011 at 4:07 PM

Is anyone, anyone at all, in Washington paying attention to this stuff?? We’ve gone down this excise tax route many times. It’s often been a disaster.

SukieTawdry on July 29, 2011 at 3:05 PM

Why, it’s almost as though they *want* this to happen, isn’t it?

Midas on July 29, 2011 at 4:08 PM

Democrats are evil.

MTF on July 29, 2011 at 2:11 PM

Bet you anything that the pissed off senior management of Boston Scientific and almost all of their Natick workers are … liberal Democraps who supported O’Bozo.

Sorry to see them educated so painfully and sorry to see these jobs leaving the U.S. But you get the government you deserve.

Jaibones on July 29, 2011 at 4:15 PM

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