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An excise tax on medical equipment, embodied in the ObamaCare law, is risking hundreds of thousands of Americans’ lives. It will reduce vital research in cutting-edge technologies and may well drive some companies out of business. The tax will fall on medical devices ranging from equipment to treat heart attacks to prosthetic limbs and wheelchairs for wounded veterans. The tax will result in job layoffs, as well, health industry officials predict.
Innumerable patients can be served by medical devices and new technologies if the medical device industry can bear the new tax. One large equipment maker, for example, who may be taxed out of business, explains why, according to an Oct. 14 report. The company makes equipment that could reduce our leading cause of death–heart disease–which killed more than 600,000 people last year. The company, Zoll Medical, makes electric paddles, called automated external defibrillators (AEDs). They can shock to life a stopped heart and restore its rhythm. A few years ago, these medical devices could be used only by trained professionals. A spokesperson for Zoll Medical said the 2.3 percent tax on medical devices will increase the company’s tax bill by an amount which could eliminate 80 percent of its profits. This would leave little resources to invest in future research and development.
Today, bright boxes with these electric paddles can be found at airports, doctors’ offices, even on the battlefield. Research has made the equipment easy enough to use by an untrained layperson, merely by following voice instructions that come with the AEDs, according to a report by Grace-Marie Turner, president of the health research organization, the Galen Institute. Her report was published in The Washington Times.
The tax targets revenues, not profits, meaning device makers will have to pay the tax even if they’re not making a profit, pointed out Christophe (cq) Sevrain, owner of CJPS Enterprises, a medical device consulting firm in Troy, MI, according to a Sept. 6 Detroit News story. The tax could force some smaller businesses with low profits into the red. About 90 device companies are located in Michigan. Nearly all are small, with revenues under $10 million, Sevrain said. Some are on the brink of discoveries that could relieve chronic conditions or other medical handicaps.
Wounded veterans, along with many other Americans made the grievous mistake of believing Obama when he said repeatedly, “If you make less than $250,000 a year, you will not see your taxes increased by a single dime. The tax will be imposed on prosthetic limbs to replace those lost in battle and wheelchairs that make the injured more mobile. The tax contains no exemption for the country’s 22 million veterans. In fact, Senate Democrats specifically refused to exempt veterans from the tax, according to the non-partisan Americans for Tax Reform. On March 24, 2010, Senate Democrats rejected an amendment offered by Sen. Orrin Hatch (R-Utah) to the health care bill. The amendment would have prevented the medical device tax from charging veterans covered by the Veterans Healthcare Program.
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