Posts Tagged ‘Excise Tax’

Taxing medical progress to death, continued: House considers Obamacare device tax repeal

by Michelle Malkin on Thursday, May 31st, 2012

This is article 295 of 686 in the topic Healthcare

In February, I focused your attention on Obamacare’s dangerous medical device tax, which is scheduled to go into full effect in 2013. Life-saving device manufacturers have been warning about the dire consequences. Reminder:

Cook Medical, which manufactures products for everything from endovascular therapy, critical care medicine and general surgery, to diagnostic and interventional procedures, to bioengineered tissue replacement and regeneration, gastroenterology and endoscopy procedures, urology, and obstetrics and gynecology, has called for the levy’s repeal. Cook Group chairman Stephen Ferguson noted the tax burden amounted to a whopping 55 percent of its profits.

“For a company like ours, which pays 35 percent of our net earnings in federal corporate taxes and another 4 to 5 percent in state and local corporate taxes, the excise tax translates to another payment that will consume 15 percent more of our earnings,” he estimated. “This creates tremendous pressure for us to move manufacturing to Europe and other parts of the world.” According to the trade publication Mass Device, the company has already canceled plans to build a new factory in the U.S. because of the Obamacare tax burden.

Stryker, a maker of artificial hips and knees based in Kalamazoo, Mich., announced in November that it would slash 5 percent of its global workforce (an estimated 1,000 workers) this coming year to reduce costs related to Obamacare’s taxes and mandates.

Covidien, a N.Y.-based surgical supplies manufacturer, recently announced layoffs of 200 American workers and plans to move some of its plant work to Mexico and Costa Rica, in part because of the coming tax hit.

Mass.-based Zoll Medical Corp., which makes defibrillators and employs some 1,800 workers in the U.S. and around the world, says the medical device tax will cost the company between $5 million and $10 million a year. Its profit in 2009 was $9.5 million. “Running our company at close to break even would not be a sustainable position for us,” CEO Richard Packer said in a public statement, “so we will be forced to look at alternatives.”

Those “alternatives” include cutting payroll, cutting R and D and passing on the costs to patients, of course. Industry estimates put the tax-induced job losses at 43,000. So far, the number-crunchers at 1600 Pennsylvania are mum on the number of potential jobs — and lives — destroyed by the medical innovation death tax.

In fact, the Obama administration’s response so far has been a flippant shrug.

Today, the House Ways and Means Committee is considering H.R. 436 — which would amend the Internal Revenue Code to repeal the tax. The movement is gaining ground on both sides of the aisle:

A bill to void the tax sponsored by Rep. Erik Paulsen (R-Minn.) will be marked up in the House Ways and Means Committee Thursday. Republican House leaders say a floor vote could be scheduled as soon as next week.

Congress already has scotched other segments of the law through bipartisan votes — including a provision that would have expanded the range of purchases that businesses must report to the Internal Revenue Service and a “glitch” that would have allowed up to three million middle-class Americans to enroll in Medicaid.

It is still unclear if the medical device tax will prove the next example.

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More on Warren Buffett’s delinquent taxes

by John Lott on Tuesday, March 13th, 2012

This is article 142 of 304 in the topic Taxation/IRS

From Bloomberg:

NetJets Inc., the private-plane company owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), was countersued by the U.S. over $366 million in taxes and penalties.
NetJets in November sued the U.S., saying the federal government had wrongly imposed taxes, interest and penalties totaling more than $642.7 million.
Claiming the federal Internal Revenue Service wrongfully assessed a so-called ticket tax — an excise tax on payments made in exchange for air transportation — to private aircraft owners maintaining their own planes, the Columbus, Ohio-based company demanded refunds and abatements.
The federal government, in a revised answer and countersuit filed yesterday in federal court in Columbus, rejected NetJets’ claims and alleged that four of the company’s units owe unpaid taxes and penalties.
NetJets Aviation Inc. owes more than $302.1 million, and another unit, NetJets International, is liable for $52.9 million, the U.S. said. Executive Jet Management Inc. owes $10 million while NetJets Large Aircraft owes $1.19 million, the U.S. claimed. . . .

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US Government Countersues Warren Buffett Company Over Unpaid Taxes

by Doug Powers on Monday, March 12th, 2012

This is article 141 of 304 in the topic Taxation/IRS

There’s an awful lot of legal wrangling and arm twisting going on here considering this is a company owned by a man who spends a great deal of time begging the government to make him pay more in taxes.

From Bloomberg News:

NetJets Inc., the private-plane company owned by Warren Buffett’s Berkshire Hathaway Inc., was countersued by the U.S. over $366 million in taxes and penalties.

NetJets in November sued the U.S., saying the federal government had wrongly imposed taxes, interest and penalties totaling more than $642.7 million.

Claiming the federal Internal Revenue Service wrongfully assessed a so-called ticket tax — an excise tax on payments made in exchange for air transportation — to private aircraft owners maintaining their own planes, the Columbus, Ohio-based company demanded refunds and abatements.

The federal government, in a revised answer and countersuit filed yesterday in federal court in Columbus, rejected NetJets’ claims and alleged that four of the company’s units owe unpaid taxes and penalties.

While Warren Buffett is leading the charge to make it look like he wants to pay more of his personal income in taxes, his companies are paying lobbyists a lot of money to try and lower their taxes. Maybe his revised “Buffett Rule” should be putting a stop to both and calling it even. Don’t hold your breath.

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Taxing medical progress to death

by Michelle Malkin on Saturday, February 18th, 2012

This is article 245 of 686 in the topic Healthcare


Photoshop credit: Rachael in Kentucky, via our Obamacare photoshop contest 2009

Taxing medical progress to death
by Michelle Malkin
Creators Syndicate
Copyright 2012

Two years ago this month, as public debate over Obamacare raged, former President Bill Clinton rushed to the hospital because of a heart condition. He immediately underwent a procedure to place two stents in one of his coronary arteries. It was a timely reminder about the dangers of stifling private-sector medical innovation. No one listened.

Stents don’t grow on trees. They were not created, developed, marketed or sold by government bureaucrats and lawmakers. One of the nation’s top stent manufacturers, Boston Scientific, warned at the time that Obamacare’s punitive medical device tax would lead to worker losses and research cuts. The 2.3 percent excise tax, the company said, “would be very damaging to Boston Scientific, and the medical device industry as a whole. In a nutshell, it would raise costs and lead to significant job losses. It does not address the quality of care but the political scorecard of savings.”

Two years later, Bill Clinton’s doing just peachy. But many medical device manufacturers are suffering, and many more are preparing for the worst as the White House gears up to collect on an estimated $20 billion from the lifesaving industry. In typical Obama-transparent fashion, the Internal Revenue Service quietly released a complex thicket of medical device tax implementation rules in a Friday document dump earlier this month. Barring congressional intervention, the medical device tax will go into full effect in 2013.

Cook Medical, which manufactures products for everything from endovascular therapy, critical care medicine and general surgery, to diagnostic and interventional procedures, to bioengineered tissue replacement and regeneration, gastroenterology and endoscopy procedures, urology, and obstetrics and gynecology, has called for the levy’s repeal. Cook Group chairman Stephen Ferguson noted the tax burden amounted to a whopping 55 percent of its profits.

“For a company like ours, which pays 35 percent of our net earnings in federal corporate taxes and another 4 to 5 percent in state and local corporate taxes, the excise tax translates to another payment that will consume 15 percent more of our earnings,” he estimated. “This creates tremendous pressure for us to move manufacturing to Europe and other parts of the world.” According to the trade publication Mass Device, the company has already canceled plans to build a new factory in the U.S. because of the Obamacare tax burden.

Stryker, a maker of artificial hips and knees based in Kalamazoo, Mich., announced in November that it would slash 5 percent of its global workforce (an estimated 1,000 workers) this coming year to reduce costs related to Obamacare’s taxes and mandates.

Covidien, a N.Y.-based surgical supplies manufacturer, recently announced layoffs of 200 American workers and plans to move some of its plant work to Mexico and Costa Rica, in part because of the coming tax hit.

Mass.-based Zoll Medical Corp., which makes defibrillators and employs some 1,800 workers in the U.S. and around the world, says the medical device tax will cost the company between $5 million and $10 million a year. Its profit in 2009 was $9.5 million.

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Company Owned by Under-Taxed Billionaire Sues IRS for ‘Illegal’ $642 Million Tax Assessment

by Doug Powers on Monday, November 21st, 2011

This is article 115 of 304 in the topic Taxation/IRS

Warren Buffett isn’t even sure what exactly President Obama’s version of the “Buffett Rule” is, so maybe the IRS will tell him “this is part of the Buffett Rule” and hope he orders his company to pay up in a rush to not appear hypocritical in any way. I wouldn’t count on it though.

From Bloomberg News:

NetJets, the private-aircraft company owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), sued the U.S. over excise taxes and penalties totaling $642.7 million assessed against the company.

The Internal Revenue Service improperly assessed the so-called ticket tax, an excise tax on payments made in exchange for air transportation, NetJets said in its complaint in federal court in Columbus, Ohio, dated Nov. 14.

NetJets seeks a refund and abatement of the ticket tax. The company claims in its suit that Congress intended the tax to apply to passengers who use commercial or charter aircraft owned by others.

Come on, Mr. Buffett — can’t your company gladly pay the tax, refuse to pass the cost on to your customers and eat the loss for the benefit of America? Berkshire stockholders will understand, won’t they? After all, the extra tax money would go to such a worthy cause.

Over the summer, Buffett spoke out against Obama’s corporate jet demagoguery — and now there’s this $642.7 million “illegal” tax assessment to fight against. If Obama isn’t careful, Buffett will express his displeasure to him directly at the next re-election fundraiser he hosts, where he’ll beg the administration to find a way to make the rich pay more.

(h/t Drew M. at Ace of Spades)

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The ‘Coming Layoffs Due to the Expense of Obamacare’ Story Du Jour

by Doug Powers on Sunday, November 13th, 2011

This is article 214 of 686 in the topic Healthcare

Is it too late for this company to request a waiver?

From the Detroit Free Press:

Stryker, the Kalamazoo-based maker of artificial hips and knees, will cut 5% of its global workforce by the end of next year to reduce costs in the face of new fees on device makers required by the U.S. health care law.

The job cuts will reduce annual pretax operating costs by more than $100 million beginning in 2013, when the medical-device excise tax is scheduled to take effect, Stryker said Thursday in a statement. Stryker had more than 20,000 employees as of Dec. 31, according to Bloomberg News data.

So there’s about 1,000 people who may soon be unemployed but who will still have access to medical treatment, thanks to Obamacare — the law designed in part to serve as a safety net for victims of its implementation. Central planning at its finest.

(h/t Drudge)

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