Last night, I joined CNBC's The Kudlow Report to discuss the recent news that 18 Senate Democrats have signed a letter urging the postponement or repeal of Obamacare's destructive medical device tax. Conservatives have warned for years that the tax would kill jobs and undermine innovation in the field, a conclusion that some Democrats have finally embraced as implementation looms. The Left has recognized this problem all along, of course, but they needed to squeeze as much on-paper revenue as possible into the Obamacare CBO score back in 2010 in order to attract those final few votes from "fiscally conservative" Democrats. Now that Obamacare's on the books, they can systematically abandon their pay-fors -- a process that's well underway. My sparring partner in this discussion was Igor Volsky, a staffer at George Soros' Think Progress. Larry asked him why Democrats will admit that higher taxes kill jobs in some cases, but not others. See if you can locate a concrete answer anywhere in here:
Volsky fascinatingly set up ideological shop several steps to the left of Elizabeth Warren and Al Franken. That alone is a noteworthy feat. But the point I tried to underscore in the segment was the bizarre certitude he projected that this medical device tax will not stifle innovation or threaten jobs. The industry will emerge unscathed by the tax increase, he argued, because it's "narrowly tailored" and "fair." Without explicitly saying so, he's basically accusing America's medical innovators of lying about how the new policy will affect their companies. And implicitly, by extension, he's suggesting that these Democrats are either gullible or corrupt for believing the lies. Apparently we're supposed to believe that the crew over at Think Progress has more expertise on the intricacies of healthcare business models than the industry's actual businesses do. Incidentally, MKH pieced together a useful rundown of just a handful of the tangible consequences of this Obamacare tax over the summer. Some highlights:
(1) An Indiana-based company is severely scaling back expansion plans, likely costing the US economy hundreds of jobs at five Midwestern plants that won't exist because of the tax. Cook Medical anticipates the device tax will cost them $20 million annually.
(2) It took Massachusetts' Abiomed three decades to become profitable. The new tax would have wiped out all of its 2012 profits, plunging the company $1.4 million into the red.
(3) Medtronic expects an increased tax bill of up to $60 million next year, an outcome that would curtail investments and research.
(4) A prosthetics manufacturer in Michigan has announced across-the-board layoffs tied directly to this tax.
But remember, Obamacare's medical device tax is narrowly targeted and fair, so it's all good. The above examples must be part of a grand conspiracy of greed, or whatever. Volsky opposes unraveling current policy, but if Senate Democrats eventually succumb to the industry's fictional grievances, he urges Democrats to find "new revenues" to fund the law. Democrats and new revenues? Shouldn't be a problem.
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