patrick.net

david1 says

thought in ECON 101 demand fell as the price increased..

Certain things are elastic in demand, and certain things aren't, and some in between. For example, when food goes up in price, people don't stop eating. When gas goes up, some conservation takes place, to a point. When unnecessary junk goes up in price, yes demand drops. I'd put healthcare closer to the food analogy. Hence increased prices to medical device producers and anything else medical related I would expect to be passed along to the consumer.

For example, taxing boats caused a huge drop in demand:
http://www.nytimes.com/1992/02/07/business/falling-tax-would-lift-all-yachts.html

zzyzzx says

For example, when food goes up in price, people don't stop eating.

The term you are looking for is necessity good. And unfortunately, there are no goods that have perfectly inelastic demand. In order for price increases to have zero effect on demand, they must be perfectly inelastic.

Rising global food prices is leading to starvation. I am sure the starving still demand the food. They just aren't market participants any longer.

Regarding the elasticity of demand, there are selections within categories of goods, even within necessity goods.

Within the food category, if you subsidize corn, people eat relatively more corn as opposed to other foods, for example collard greens. Since corn is less healthy for people than collard greens are, the people become less healthy too. Obesity is correlated with public assistance: instead of starving, the poor in America get fattened up on corn like CAFO cattle for the medical industrial complex.

Within the medical category, if you tax vaccines, people will get relatively fewer vaccines. They don't perceive the necessity if they aren't sick. Obamacare increases the tax on vaccines, and insurance coverage for them is sharply limited, and vaccines in America already cost several times more than in other countries. Similarly, Homefool sings the praises of his disproved SSRIs, which are toxic, but actual progress has occurred in the development of devices; this is why PhRMA wanted (and got) a tax on devices, to subsidize disproved pills.

To understand federal policy, you have to look at it in totality, and understand how it's made. The same federal government that taxes vaccines also subsidizes corn (including HFCS). The human CAFO model reflects the logical result of different lobbyists and politicians pursuing their own self-interest, maximizing revenue and power for themselves and their patronage networks.

Of course Obamacare taxes the poor, but since by definition they don't have much $ the tax on them is mostly in the form of ill health, by manipulating their food choices and putting their kids on toxic pills. Since Obamacare taxes headcount at affected employers, it also makes it harder for poor people to find a job, since the extra tax disproportionately affects jobs at the low end. Working harder for less, paying extra for anything not covered by lobbyist-written legislation, even what little they have is taken from them.

zzyzzx says

Hence increased prices to medical device producers and anything else medical related I would expect to be passed along to the consumer.

Since items that are sold directly to consumers are exempt from the tax, please explain the mechanism by which medical device manufacturers will "pass the cost on to consumers".

Homeboy says

ince items that are sold directly to consumers are exempt from the tax,

Where does it say this???

zzyzzx says

Where does it say this?

The IRS says, "There are specific statutory exemptions for eyeglasses, contact lenses, and hearing aids. There is also an exemption for other devices that are of a type that are generally purchased by the general public at retail for individual use (the retail exemption)."

Obamacare is only one part of a larger policy landscape to make people overpay for necessity goods. Eyeglass retailers are mostly owned by Luxxotica (which owns both Lenscrafters and Pearle Vision, among others), although they are facing competition from online retail (e.g. Zenni). Contact lenses cost 10x what they should, because of the Rx requirement. Mike Wallace did great work exposing abuses in the hearing aid industry on "60 Minutes". Eyeglasses and contact lenses are generally not covered by insurance, although certain employee "benefit" programs (Luxxotica marketing in disguise) may offer you a "discount" off their incredible markup, in exchange for your Social Security Number and whatever other information they might want. Obamacare worsens existing problems, but it isn't the entire problem in itself.

http://www.irs.gov/publications/p510/ch05.html

Apparently coal, fishing tackle, and outboard engines count as "medical devices." Makes you wonder what other oddball items will be taxed under this entirely too-broad tax envelope. If coal can be included, then anything could be included. I suppose this is Obama's back door for raising taxes to cover Obamacare.

C'mon, homeslice, tell me that poor people don't buy fishing poles! I dare ya!

Quigley says

http://www.irs.gov/publications/p510/ch05.html

Apparently coal, fishing tackle, and outboard engines count as "medical devices." Makes you wonder what other oddball items will be taxed under this entirely too-broad tax envelope. If coal can be included, then anything could be included. I suppose this is Obama's back door for raising taxes to cover Obamacare.

C'mon, homeslice, tell me that poor people don't buy fishing poles! I dare ya!

That appears to be a link to an IRS webpage listing ALL excise taxes, not excise taxes for medical devices under ACA. Do you have some reason for believing these items you mentioned are part of the ACA tax on medical devices?

zzyzzx says

Homeboy says

ince items that are sold directly to consumers are exempt from the tax,

Where does it say this???

Google is your friend.

http://www.irs.gov/uac/Medical-Device-Excise-Tax:-Frequently-Asked-Questions

I find it hilarious that you are vehemently arguing against this tax, and in fact even having a condescending attitude about it, when you aren't even aware of the most basic facts about it.

Keep up the good work.

Homeboy says

You are the one making the claim that ACA taxes the poor. This puts YOU in the position of needing to support your claim with evidence. You cannot simply make a claim and demand that I disprove it. That's ridiculous. I could just as easily say the moon is made of green cheese and demand that you provide scientific evidence to dispute me.

Perhaps you need to back up a bit and recall who is saying who and responding to what claim.

You asked" Do you deny that the increased number of people with medical coverage will give more business to the medical device manufacturers, and that this windfall benefit will offset the negatives of the tax? "

I responded that I could neither confirm nor deny that, and that neither could you. It is unknowable - it is conjecture based on assumptions of profits on the largest companies, and whether *I* personally can or cannot list one small business that may be negatively impacted does not mean that (a) small businesses will not be impacted, (b) that the concerns of this tax on small business are invalid, and (c) that all businesses should be assumed to have huge profit margins.

THIS part of the conversation was NOT specifically about taxing the "poor," and *I* never made the claim that there was a specific tax on the poor although I believe ACA this will cause prices to increase elsewhere in the system that may impact the poor overall, but will regardless significantly impact the middle class.

Homeboy says

You claimed there are thousands of small medical device makers who would be decimated by the excise tax, yet you have failed to provide an example of even ONE of these.

I do not recall ever making such a claim. Perhaps you simply misunderstood what I wrote, since you make such a sweeping misinterpretation. The issue, if you recall, was YOUR claim that the increase in business would offset the excise tax for medical device makers. Shall we now assume that you believe that the excise tax will be a profit windfall for thousands of small medical device makers? None would be impacted by this?

Again, it is YOUR claim that I was addressing through your "do you deny question." It is you who said that not knowing should be reason not to question ACA. Yet there is no way for you to know either. This is all yet to be seen. No amount of changing what I wrote to be something different, and shifting responsibility for proof (since you cannot prove your claim either) will change that you simply do not know. Do you really think that you do?

If so, it should be easy for you to prove this, and this isn't a wishful claim similar to the moon being made of green cheese.. Again - you are the one who made the initial claim here... Where's your evidence?

Homeboy says

... the medical device industry maintains one of the highest profit margins in the private sector

Impressive list. When discussing profit margins, dollar figures by themselves are meaningless (you knew that, right?). Gross profit margins per device are helpful, but not do not indicate anything when you claim that "... the medical device industry maintains one of the highest profit margins in the private sector," as the industry's profit margin is indicated by net profit margin, not gross margin.

So generally speaking, what is the net profit margin of the medical device industry?

Paralithodes says

THIS part of the conversation was NOT specifically about taxing the "poor," and *I* never made the claim that there was a specific tax on the poor although I believe ACA this will cause prices to increase elsewhere in the system that may impact the poor overall, but will regardless significantly impact the middle class.

Sorry, I'm not going to let you wiggle out of your argument. You made a claim that that the tax on medical device manufacturers is going to affect consumers, right? Then you said you don't know if the tax will be offset by increased revenue. And now you appear to be saying you are not capable of naming even ONE of the supposedly "hundreds or thousands" of companies that you earlier claimed WOULD be affected. Therefore you have not backed up your claims with any evidence.

Paralithodes says

I believe ACA this will cause prices to increase elsewhere in the system that may impact the poor overall, but will regardless significantly impact the middle class.

Yes, well I am proceeding on facts, whereas you are proceeding only on "beliefs".

Paralithodes says

I do not recall ever making such a claim.

To wit:

Paralithodes says

I don't understand. Are you asking me to list the hundreds or more likely thousands of small businesses that produce some type of medical device and would be impacted by this? Or is your question a way of not acknowledging that there ARE many small businesses that would be hit by this? If I don't list any, will you argue that since I didn't list any, there must therefore not BE any small business that make medical devices?

Paralithodes says

If so, it should be easy for you to prove this, and this isn't a wishful claim similar to the moon being made of green cheese.. Again - you are the one who made the initial claim here... Where's your evidence?

Blah, blah, blah. You're just trying to shift the burden of proof. Go back to the thread title. "DOES OBAMACARE TAX THE POOR"? Show me how it taxes the poor. "Beliefs", "maybes", and "I don't knows" don't cut it.

Paralithodes says

Impressive list. When discussing profit margins, dollar figures by themselves are meaningless (you knew that, right?). Gross profit margins per device are helpful, but not do not indicate anything when you claim that "... the medical device industry maintains one of the highest profit margins in the private sector," as the industry's profit margin is indicated by net profit margin, not gross margin

Ha ha, I knew it. You bring nothing to the table here. You simply sit back and demand that *I* provide evidence so that you can pick at it at your leisure. Those are 3 different links, and you are conflating them. ONE of them lists gross profit.

If you really believe the medical device industry is struggling to stay above water, could you maybe post just one teensy bit of data? Doesn't seem like you like to back up anything you write.

Quigley - I'm still waiting for you to explain how that random IRS page of excise taxes is in any way related to ACA. Are you MIA now?

Since the jury is still out on what the impact of the medical device tax will really be (since it is so new), it is obviously difficult for me to provide you with the proof you demand. Likewise, you stated your position as if it were an undeniable fact, or that to deny it would be unreasonable.

Here's one organization's view on the matter.
http://www.medicaldevices.org/issues/Health-Care-Reform,-Device-Tax
Certainly you can reject ANY example at this point, but here is one thing that they claim:

"MDMA has pointed out that there is no data or studies that show the costs of this "innovation tax" will be offset due to an increased pool of insured beneficiaries receiving treatment."

Clearly, you have data (EVIDENCE) to refute this. Can you please provide it?

http://www.medicaldevices.org/node/1423

"Report Predicts Minimal ACA Impact on Medical Device Utilization

01/18/2013

A report released this week by the equity research department of a leading investment bank focusing on medical technology included forecasts that implementation of the Affordable Care Act would do little to cause an uptick in medical device utility.

The report specifically cited the following reasons why ACA implementation would have a “minimal” impact on the med-tech industry:

• The number of uninsured is reduced by only 30 million through 2022 and the increase in coverage is phased in over time
• The majority of the uninsured are under the age of 65 and people under 65 consume less medical technology compared to those 65 and older

This report is consistent with the position MDMA has argued from the beginning regarding the medical device tax and the "windfall" argument that some elected officials have made."

-------------------
But Homeboy, you KNOW differently. Can you please provide a teensy weensy bit of evidence for your position, which you claimed before I even responded to you (therefore, the burden of proof is on you)?

Here are some articles that discuss the potential impact of the excise tax, including reference to some specific companies that will cut R&D, lay off workers, etc., as a direct result. So here is the evidence that you were looking for, that at the very least, is contrary to YOUR claim that the excise tax would NOT impact the industry negatively.

http://articles.sun-sentinel.com/2013-01-07/careers/fl-medical-device-tax-20130104_1_medical-device-medical-tax-excise

http://www.vcstar.com/news/2012/oct/27/shirley-medical-device-tax-will-impact-jobs-and/

http://thehill.com/blogs/congress-blog/healthcare/290337-buyers-remorese-over-medical-device-tax

http://www.bizjournals.com/boston/blog/bioflash/2013/03/medical-device-tax-to-cost-top-19.html

Paralithodes says

Here's one organization's view on the matter.

http://www.medicaldevices.org/issues/Health-Care-Reform,-Device-Tax

Certainly you can reject ANY example at this point, but here is one thing that they claim:

"MDMA has pointed out that there is no data or studies that show the costs of this "innovation tax" will be offset due to an increased pool of insured beneficiaries receiving treatment."

Clearly, you have data (EVIDENCE) to refute this. Can you please provide it?

Really? That's what you're bringing to the table? Excuse me, but what would you EXPECT the Medical Device Manufacturer's Association to say? Of course they would love it if they get the windfall of new business AND don't have to pay the tax, because it will make them even richer. I would be surprised if they DIDN'T push to have the tax repealed. But surely you aren't suggesting this is any sort of impartial evidence.

Paralithodes says

A report released this week by the equity research department of a leading investment bank focusing on medical technology included forecasts that implementation of the Affordable Care Act would do little to cause an uptick in medical device utility.

The report specifically cited the following reasons why ACA implementation would have a “minimal” impact on the med-tech industry:

• The number of uninsured is reduced by only 30 million through 2022 and the increase in coverage is phased in over time

• The majority of the uninsured are under the age of 65 and people under 65 consume less medical technology compared to those 65 and older

This report is consistent with the position MDMA has argued from the beginning regarding the medical device tax and the "windfall" argument that some elected officials have made."

Gosh, another press release by....you guessed it - the Medical Device Manufacturer's Association. This one doesn't even make sense. What does "ONLY 30 million" mean? 30 million sounds like a lot to me. And consuming less medical technology than people over 65 doesn't mean none at all. Where is this alleged report? I don't even see it.