As of Jan 1, 2013 all companies that manufacturer “medical products” will have to pay a 2.3% tax on GROSS SALES. For many companies, particularly small and/or start ups, this could be > 50% of their net profits. In the case of start ups .. could be adding an additional cost when they are not even showing a profit. Could deter some from starring a company or cause some to fold prematurely.
According to this report, many of these companies are contemplating lay offs, reduction in R&D funding, and/or put a freeze on expansion and hiring additional employees.
This may put a chilling effect on discovery and introduction of new product(s) that could improve a person’s quality of life or even save a life.
On the other side of this issue, there are going to be thousands or tens of thousands of employees in this part of the industry that will be unemployed.. in a time when unemployment is at or near a all time high.
Meaning that these employees will end up drawing unemployment, draw down their savings for retirement , children’s education… could end up on food stamps, having their house foreclosed on… and on and on..
Are we trading off additional monies for healthcare while adding on liabilities for supporting these unemployed workers from state/federal funds.. could it end up being a negative cash flow for the government from this segment of our economy?
Filed under: General Problems
well, its a good thing the president wants to extend unemployment benefits and get more people on food stamps and is raising taxes on the rich. i’m sure happy we have obama to bail people out in cases like this where capitalism fails.