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Saturday, July 28, 2012

Company Scraps Plans For 5 New Manufacturing Plants Citing Obamacare Medical Device Tax

By Susan Duclos

The quote that everyone should be concerned with comes from Indiana based Cook Medical spokesperson who states "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."

 The tax he refers to is the medical device tax written into the Democrats and Barack Obama's health care law aka Obamacare, which is one of 20 taxes associated with the law.

(See Comprehensive list of Obamacare tax hikes)

12. Tax on Medical Device Manufacturers ($20 bil/Jan 2013): Medical device manufacturers employ360,000 people in 6000 plants across the country. This law imposes a new 2.3% excise tax. Exempts items retailing for < $100. Bill: PPACA; Page: 1,980-1,986

Five manufacturing plants, each plant would have employed up to 300 people, for a total of up to 1,500 jobs that could have been created by one company, but will not be created because of this Obamacare tax.

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.
 Cook Medical produces medical devices for surgery, obstetrics, gynecology and other fields.
Conservatives have maintained consistently that Obamacare, taxes, and Obama's onerous regulations, would harm job creation and Cook Medical is just one example of how many jobs are being lost from Obama's policies and agenda.

In mid-July, President Matthew Shay of National Retail Federation predicted "This law will have a dramatic, negative impact on every employer and employee in the U.S. and further constrain job creation and economic growth."

With unemployment at 8.2 percent, making it the 41st straight month unemployment has been over 8 percent and the U6 total unemployment at 14.9 percent, and economic growth down to 1.5 percent as of the latest government report, policies that stunt job creation and economic growth are one reason the U.S. is suffering through one of the slowest recoveries in history.

Via IBD:

• Employment: By this point, the average job growth in the past 10 recoveries was 6.9%. Under Obama, jobs have grown by just 1.9%, according to data from the Minneapolis Federal Reserve.

• GDP growth: The Obama recovery has also performed far worse than average when it comes to GDP growth. After 11 quarters, the economy is still only 6.8% bigger than it was when the recession ended. In contrast, GDP was 16% bigger, on average, by this point in the previous 10 recoveries, the Minneapolis Fed data show.

• Incomes: By the third year of the past five recoveries, real median household incomes climbed an average 2.8%, according to the Census Bureau, which only has household income data back to 1967.

But in the current recovery, real household incomes dropped 5.4% during the recovery, according to Sentier Research, which compiles a monthly household income index using Census data.

• Deficits: The current recovery also doesn't stack up well when it comes to annual federal deficits. By this point in previous recoveries, deficits were running an average 2.2% of GDP. This year, they're expected to be 7.6%, according to the Congressional Budget Office.

• National debt: Although Obama claims that he's cleaning up after the "wild debts" Republicans ran up, the national debt has climbed much faster during Obama's economic recovery than the typical recovery in the past.

On average, federal debt climbed 9.5% in the first three years of those recoveries, after adjusting for inflation. Under Obama, debt has climbed $4 trillion since the recovery started, a 28% increase in real terms.

Obama, this last week, stated that his policies were working. In November the American electorate will have to decide if they agree with him, whether the data confirms his belief or contradicts it, and whether we need an administration that encourages job growth and economic growth or an administration that will continue to implement the polices that have job creators like Cook Medical saying "In reality, we're not looking at the U.S. to build factories anymore...."