Friday, July 27, 2012

Cook Medical Cancels Expansion Plans Due To Obamacare Tax Increases

Bloomington-based Cook Medical had planned to open five new manufacturing plants in the Midwest, including Indiana, as part of a planned expansion, but it has shelved those plans because of a new tax that it will have to pay beginning in January under Obama's Affordable Care Act. The company says the new tax could result in the loss of 1,000 American jobs as it shifts its expansion overseas due to the unfriendly business climate Obama's administration has dealt it. From the IBJ:

Cook Medical Inc. had been planning to open five new manufacturing plants over the next five years in small communities around the Midwest, including Indiana, but has shelved those plans because of the hit it will take from a new U.S. tax on medical devices.
The Bloomington-based medical device maker estimates it will pay between $20 million and $30 million once the tax takes effect in January, Pete Yonkman, executive vice president of strategic business units at Cook Medical, said this week.
The 2.3-percent tax on sales of all medical devices was created as part of President Obama’s 2010 health reform law to help pay for its expansion of health insurance coverage to as many as 30 million more Americans. The tax is projected to raised about $2.9 billion per year . . .
Cook officials have long been critical of the medical device tax. Even before it became law, Bill Cook said it could cost the company as many as 1,000 jobs.
Since then, Cook officials have said their future growth will be focused overseas. Cook already has production facilities in Ireland, Denmark and Australia . . .


Indy Rob said...

While I am not sure how putting a tax on medical devices makes healthcare more affordable (subtle sarcasm), I wonder why our legislators continue to make decisions that encourage manufacturing anything outside of the US.
Congressmen, etc, repeat after me, "if I want to tax goods made in the US, I have to also tax goods made outside the US." otherwise I am going to eliminate even more US jobs.

Michael Kobrowski said...

It is a sales tax. It will be collected on all medical devices sold. The people who are needing those devices are right here in the USA. If you produce the devices here or overseas, doesn't matter.

I guess Cook will sell less devices to Americans now. Not like those sales taxes get passed on to the consumers anyway. I think this sounds all very election year hokey, doesn't it?