Obamitax on medical devices = more lost jobs

[DougBH]

Typical profit margins of large medical device manufacturers are 64%.

They do seem to be large, but a quick check of the internet doesn't show anything like that. Maybe a half or third of that percentage. Do you have a source for your percentage?

[sisyphus]

I love it:

http://www.ibj.com/cook-medical-shel.../article/35735



Yet:



It does NOT matter where you make the device, the tax is NOT on the manufacturing of it, it's on the sale of it. Where you MAKE it matters not.

So, PPACA is another Obama outsourcing fact...

[bioya1]

...


It does NOT matter where you make the device, the tax is NOT on the manufacturing of it, it's on the sale of it. Where you MAKE it matters not.

From the original Fox News link:

"The tax will not cause manufacturers to shift production overseas. The tax applies equally to imported and domestically produced devices, and devices produced in the United States for export are tax-exempt," the study said.

Read more: http://www.foxnews.com/politics/2012...#ixzz21t3q7Asg

The more I read, the more I am left with that conclusion that this Cook outfit is either incredivbly poorly managed or that they are simply lying through their teeth.

I am guessing the latter BTW.

[Dr BloodMoney]

So, PPACA is another Obama outsourcing fact...

Nope, because foreign sales are not taxed, so there is no incentive to go overseas.

The company needed a scape goat to blame it's cancellation of 'expansion' plans....

[bioya1]

They do seem to be large, but a quick check of the internet doesn't show anything like that. Maybe a half or third of that percentage. Do you have a source for your percentage?

It doesn't really matter with an excise tax.

Think back to Introductory Price Theory (e.g. supply and demand).

[PeterGriffin]

They do seem to be large, but a quick check of the internet doesn't show anything like that. Maybe a half or third of that percentage. Do you have a source for your percentage?

http://seekingalpha.com/article/4592...-profitability

[Dr BloodMoney]

From the original Fox News link:



The more I read, the more I am left with that conclusion that this Cook outfit is either incredivbly poorly managed or that they are simply lying through their teeth.

I am guessing the latter BTW.

Maybe not even that. Blowing smokes up peoples ass comes to mind.... Nice and convenient, canceling these expansion plans. Of course I'd need to see the leases or sales contract for the canceled plant to be built and opened in early 2013.... yeah right.

[Jagergeist]

I'm sorry, no company is going to pay what they claim:

Read more: http://www.foxnews.com/politics/2012...#ixzz21t0gkTJo

Of course Fox News did NOT ask the company to actually explain that comment.

Yeah, this sounds like a load of business generated hype and horse crap. They want to maximize their profits and I can understand that. Pretending a 2.5% tax will somehow block hundreds of new jobs and new factories sounds like a lie at face value. Who are they kidding, the medical industry is going to see increased sales with all the newly covered people in ACA.

[DougBH]

Originally Posted by DougBH View Post
They do seem to be large, but a quick check of the internet doesn't show anything like that. Maybe a half or third of that percentage. Do you have a source for your percentage?

http://seekingalpha.com/article/4592...-profitability

Ok. That explains the difference. The 64% is the gross margin, not the profit margin. It does not include administrative and selling costs in the calculation. These companies do have a very large profit margin compared to the much vilified oil companies, but not any 64%.

[lucylou]

What is the yearly profit of a typical business? 5%? Cut that in half...and it's not worth it.

The tax is not even applied here, but let's say you're right. Rethink your math. A tax of 2.3 % is not half of your profit even it you only make 5% profit. Let's say your profit for the year is $100. A 2.3 % tax would be $2.30. Your profit is nowhere near cut in half, right?

The problem is too many people don't really understand how numbers, taxes, percentages, actually work.

[lucylou]

What is the yearly profit of a typical business? 5%? Cut that in half...and it's not worth it.

Do you realize how insane it is to claim that a 2.3% tax cuts a 5% profit in half? Only a 50% tax can cut a profit in half. A profit reduced by 2.5t% still leaves 97.5% of the profit with the earner.

[PeterGriffin]

Ok. That explains the difference. The 64% is the gross margin, not the profit margin. It does not include administrative and selling costs in the calculation. These companies do have a very large profit margin compared to the much vilified oil companies, but not any 64%.

Its very high for any business. 42% is what you're shooting for in any traditional manufacturing, and that's been a pipe dream for a long time.

The point is, a 2.3% tax is not killing any business, as the economics prof and succssfule investor and other capitalists on this thread are scoffing at. You gotta be some kinda simple to buy what this tripe article is selling. Which explains some things.

[lucylou]

What is the yearly profit of a typical business? 5%? Cut that in half...and it's not worth it.

You don't undersand taxes or math. Only a 50% tax cuts a profit in half. 2.3% tax cuts a profit by 2.3%. A $100 profit with a 2.3% tax leaves a profit of $97.70. You would consider that not worth it????

[PSBandit]

The point is, a 2.3% tax is not killing any business, as the economics prof and succssfule investor and other capitalists on this thread are scoffing at. You gotta be some kinda simple to buy what this tripe article is selling. Which explains some things.

Om nom nom...

Meanwhile back in the real world...

Indiana company scraps plans for expansion over ObamaCare device tax
http://www.foxnews.com/politics/2012...re-device-tax/

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.

[Billy_Bob]

A 2.3% excise tax? Come on. Use your ****ing head.

that's what we say to liberals... sadly they dont know how..