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Cheney: Medical Device Tax ‘One of the Dumbest Ideas’ in Obamacare

"I can’t imagine anything worse -- well, I’m sure I can, but I think it’s just an example of how ill-conceived parts of this program are.”

by
Nicholas Ballasy

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December 4, 2013 - 5:41 pm
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WASHINGTON — Former Vice President Dick Cheney called the medical device tax under Obamacare “one of the dumbest ideas” he’s ever heard.

“I worry very much about the device tax,” Cheney said at the National Press Club on Tuesday night.

“This is a new tax, a new tax that’s going to be imposed on medical devices. I think that’s one of the dumbest ideas I’ve heard of and I feel very strongly about it. I’m literally walking around proof about how great, of how innovative our healthcare system has been. I can’t imagine anything worse — well, I’m sure I can, but I think it’s just an example of how ill-conceived parts of this program are.”

The 2.3 percent tax took effect at the beginning of 2013 and is expected to raise approximately $29 billion over the next 10 years as a way to pay for the healthcare law.

A 2011 study funded by AdvaMed, an industry trade association, estimated that the medical device industry could lose 43,000 U.S. jobs due to the tax, the Fiscal Times reported. Lawmakers on both sides of the aisle whose districts are particularly affected have proposed repeal of the tax.

Cheney cited the creation of stents to support his position on the medical device tax. Julio Palmaz invented the balloon expandable stent with the help of $250,000 from Phil Romano, founder of Fuddruckers and Macaroni Grill. The idea was eventually patented and bought by Johnson & Johnson.

“The initiative and incentive for them to do that and make it happen didn’t come from the government; it was something they put together themselves and now under Obamacare we’re going to tax makers of the devices,” Cheney said.

Cheney also said he was uninsured at one time but for most of his life he was covered by a Blue Cross Blue Shield plan while in public service.

“There was a time in my life when I was about 23, shortly before I got married, when I got sick, hospitalized and had no health insurance. I spent our honeymoon money on medical bills,” he said.

Cheney added that the Blue Cross Blue Shield plan “basically financed” all of his healthcare; when he left the White House, he went on Medicare.

Cheney’s comments were made during a discussion about the book he co-authored with his cardiologist Dr. Jonathan Reiner, called Heart: An American Medical Odyssey.

During the book discussion, Cheney told the audience that he wrote a letter of resignation addressed to the secretary of State in case he had a life-threatening heart attack. Cheney said he gave it to his chief legal counsel, David Spears Addington, since there was no legal way under the Constitution to remove an incapacitated vice president.

“If the need ever arose, if I ever reached a point where I was no longer able to function as the vice president, then I wanted him to present that to the president,” Cheney said, adding that Addington and Bush were the other two who knew of the letter.

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Top Rated Comments   
THE TAX ON MEDICAL DEVICES IS A WAY TO LOWER COSTS
Medical devices save lives, help us live longer. Of course, if we live longer, it raises the cost of the ACA, which the 'Cost-Rationing Boards', aka 'Death Panels', are set up to avoid. So the medical device tax is a stealth way to ration help. That is, it makes life-extending devices too expensive to save lives.
41 weeks ago
41 weeks ago Link To Comment
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All Comments   (8)
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my classmate's mom makes $80 an hour on the computer. She has been unemployed for six months but last month her payment was $13591 just working on the computer for a few hours. you could try this out......... www.Bay95.com
40 weeks ago
40 weeks ago Link To Comment
Of course, the liberal fall back position is always "well... maybe just a few small things about Obamacare are faulty."

Could be. Could be that in the whole, complex system, only a few components are failures. Kind of like those O-Rings in the space shuttle Challenger.
41 weeks ago
41 weeks ago Link To Comment
um, Big Pharma isn't taxed. Big Insurance isn't taxed. So why are medical devices taxed, even though the tax revenue has to be insignificant relative to the "Big" boys?

Could it be that they wouldn't play ball with the thugs?
41 weeks ago
41 weeks ago Link To Comment
I dunno. Drug Prohibition is pretty stupid. Unless you own stock in private prisons.
41 weeks ago
41 weeks ago Link To Comment
Here are the primary consequences of this tax increase:

1) The government will get new tax revenue.

2) There will be a drop sales revenue and profits among US medical device companies due to the price increases necessary to cover the new tax. They will pay less corp. income tax as a result.

3) Some companies will attempt to produce the same output with fewer costs (i.e. fewer employees) to cover the tax. Laid off employees will become tax consumers instead of tax payers.

4) Medical device companies may choose to cut back on research and development. Surrendering global market leadership will have serious consequences for future growth and profitability.

5) If profitability declines so will stock prices and so will the portfolios of average Americans and pension plans everywhere. They will pay fewer taxes and in the case of public pensions, consume more tax revenue.

6) Negative impact on tax revenue from 2, 3, 4 and 5 above will far outweigh any gain from the new device tax.

And in any case, unless you are an economic illiterate or a socialist, you know that such taxes are always paid primarily by the middle productive class - in this case through higher premiums and medical costs, lost jobs or decline in 401k values. Corporations do not pay taxes - they only pass them on to their customers or reduce their payroll to compensate.

The usual statist response to this inviolable principle is to set price levels or to shame corporations into acting against their shareholder interests. But then supply diminishes and capital does not flow into engines of productivity - as has been shown so many times in history where this has been attempted. In that case, we might as well go directly to full socialism and let the system implode as it always has in the past. Then we can re-start and prosper under free market capitalism. At least until another set of power seeking socialist dunderheads like Obama, Pelosi and Reid sweet talk enough useful idiots into letting them try these stupid Utopian schemes once again.
41 weeks ago
41 weeks ago Link To Comment
THE TAX ON MEDICAL DEVICES IS A WAY TO LOWER COSTS
Medical devices save lives, help us live longer. Of course, if we live longer, it raises the cost of the ACA, which the 'Cost-Rationing Boards', aka 'Death Panels', are set up to avoid. So the medical device tax is a stealth way to ration help. That is, it makes life-extending devices too expensive to save lives.
41 weeks ago
41 weeks ago Link To Comment
Another day, another reminder of why this POS bill needs to be repealed.
41 weeks ago
41 weeks ago Link To Comment
My husband uses an appliance because of kidney disease. He's had it since he was 6. The damned things are already expensive enough, and now we are being penalized for his birth defect.
THANKS, MR. RESIDENT! As if we didn't already pay enough to support your a$$.
41 weeks ago
41 weeks ago Link To Comment
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