Obamacare.net

Affordable Care Act Information & Healthcare Agent Network

In Michigan, Obamacare is Already a Job-Killer

A Picture of Abby Coleman Abby Coleman
11/21/2011

While the White House continues its rhetoric on job creation, the job-killing effects of Obamacare are already taking effect. One provision of the law, its tax on medical device manufacturers, is already having a detrimental impact on a Michigan-based manufacturer.
Stryker Corporation has announced that it will cut approximately 5 percent of its workforce by 2013 due to the tax. As Heritage has shown, this isn’t the first device manufacturer to voice concerns about job loss in the U.S. resulting from the tax, and it is sure not to be the last.

Over 110 jobs will be cut in Kalamazoo alone, bad news for a state already facing over 11 percent unemployment. According to the firm:

The targeted reductions and other restructuring activities are being initiated to provide efficiencies and realign resources in advance of the new Medical Device Excise Tax scheduled to begin in 2013.

As Heritage policy analyst Kathryn Nix explains, the medical device industry “now faces major job losses due to the new Obamacare tax on medical devices. The tax is intended to raise $2.2 billion a year to help foot the bill for Obamacare.” But despite the fact that the raised revenue will be a pittance compared to the price tag of new Obamacare spending, its impact on jobs in the medical device industry, and the cost of their products, will be very real.

A report released in September by Diana Furchtgott-Roth, former chief economist at the Department of Labor, illustrates the potential effects of the tax on firms like Stryker and the rest of the device manufacturing industry, which employed over 400,000 Americans in 2009:

The new 2.3% excise tax will roughly double the device industry’s total tax bill and raise the average effective corporate income tax rate to one the highest effective tax rates faced by any industry in the world. Moreover, the new tax will be paid both by firms that have net income and those that do not. The tax will be especially harmful to companies that innovate and tend to suffer losses in the first years or when investing in research and development for a new product but would still be required to pay the tax.

The medical device tax is just one of many new taxes included in the new health care law. These taxes will hinder America‘s economic recovery and job growth. As Heritage tax expert Curtis Dubay writes:

All tax increases have negative economic effects because higher taxes take resources from the productive hands of the private sector and transfer them to the wasteful hands of politicians. Higher taxes also lessen the incentives for individuals and businesses to engage in activities and behaviors that expand the economy and create jobs.

Obamacare’s taxes and regulations are the last thing our country needs right now as unemployment remains above 9 percent and the economy stagnates.

BY JAY LUCAS and ALYENE SENGER -

Jay Lucas and Alyene Senger are members of the Young Leaders Program at The Heritage Foundation.

6 Comments

  1. Jill January 4, 2012

    Really? Why don't we cut the salaries of the heads of these medical device companies and see how much money they can save. If they were not paying their CEO's and other upper management astronomical slalries and bonuses, they would have their profits…

  2. MAD MI MAN June 28, 2012

    SO let me get this much clear.. The issue with OBAMA CARE is that businesses who did not provide insurance for its employees will now have to, regardless if they like it or not; OR face fines and what not? SOO what's happening is that these fking rich greedy small business owners that play by the book which means they charge top dollar for their services or products, in order to pay taxes and payroll and loans, are BITCHING about now having to pay for people to have ins when their only paying the employee like 9 10 fkin dollars anyway. SO these morons in this pathetic world are deciding to take the federal fine of a couple grand rather help provide ins for people, or CUT JOBS??? because it's cheaper??? NOW leaving them to HAVE to get ins from the GOV, or face a fine themselves, and YOU PEOPLE are blaming OBAMA because of they way it's set up??? FOR REAL??? WHy not blame the guy playing the game if they decide to be a part of it, that decides NOT to provide his or her employee ins, and NOT blame the guy trying to recover from a growing billion dollar debt in the healthcare system due to people without the ability to pay for service in order to keep them or their kids safe and healthy. Are you telling me a country filled with 100 million christians are MAD and having this huge debate about this and disrespect the very president we elected in his face like he is suppose to smile and give you a toy like a child that only spat in his face but cry like a baby when their not fully happy because they have to help pay for the cost to take care of our people and our nation?!?! WTF IS GOING ON IN THIS WORLD that people are so FAKE and pathetic they can't see past the nightly news BS and complain about sharing like a 2 yr old yet calls them self a follower of Jesus.. lmao YEAH RIGHt!!!! lolololololol THIS is what people are fussing about.. Sharing a few dollars to help others get and maintain insurance and pay for the debt OUR country is in, and you are all worried about worried about who has to pay for what like a bad uncle that no one invites out to dinner because he makes eveyone pay on a their own bill and share the tip but doesn't wan to pitch in.. LMAO! Bet these are the same people preaching SUPPORT OUR TROOPS but never do shit but say support our troops… lmao what a joke the people of this country have become. NO WONDER we must be controlled like slaves.. sad really

  3. Micheal July 1, 2012

    Rich, greedy small business owners?? If they were rich then it probably wouldn't be a small business dumbass. Most of your small business owners work the majority of the hours themselves and can't afford to make a living while paying several workers lots of money and their benefits.

  4. Bob A September 5, 2013

    And people think that athletes are over paid. They are boy scouts compared to some insurance and bank ex’s

  5. curly1 September 24, 2013

    There is so much wrong with what you said, MAD MI MAN, I don’t know where to start. I work in a hospital and process payments for poor, rich and middle class patients.Obamacare has so far, screwed the middle and poor like I have never seen in 26 years. At the end of this, only rich people will be able to go to the doctor of their choice when they want. The rest of us will wait months for an appointment,be denied payments,drugs, and no, you WON’T be able to keep your doctor. Obamacare will put private insurance out of business in less than 2 years by design, and then he will raise your rates three-fold. Instant low-income society.If you don’t see this, you deserve what all of us are going to get.

  6. curly1 September 24, 2013

    You want to cut the salaries of the only people who made a business successful and employed hundreds of other people. Profits go to research and salary, in my opinion, well-deserved because otherwise, there would be no jobs. Why don’t you just cut off your nose to spite your face? The people who have money, SPEND money. On your product, your business, your stores, and employ your neighbors. Wake the hell up.