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In my article the other day on the Baucus health care bill, I noted the new taxes he has proposed in order to pay for it. Today, a Wall Street Journal editorial took a close look on one of those taxes -- a $4 billion per year levy on medical device makers. The editorial highlights how damaging it would prove to an important industry:

This new tax will eventually be passed through to patients, increasing health-care costs. It will also harm innovation, taking a big bite out of the research and development that leads to medical advancements. The core of the industry (excluding a few conglomerates like Johnson & Johnson) spent about $9.6 billion on product development in 2007, according to Ernst and Young. The Baucus tax is nearly half that, and also exceeds $3.7 billion, the total venture capital invested in device makers that same year.

John Kerry, representing a state with a large medical device industry, has expressed concern about the measure.

View all comments (15) | Leave a comment

Ken (Old Texican)| 9.18.09 @ 7:11PM

Mr. Klein
Just another example of the locusts trying to eat our seed corn.

Greta| 9.19.09 @ 12:13AM

hell is frozen. a tax john kerry does not like.

jim| 9.19.09 @ 8:22AM

Advanced medical technology is expensive to the government. Restricting its development is a cost containment policy. It's a whole new way to think about healthcare.

Liberal Reader| 9.19.09 @ 12:13PM

If the Baucus bill passes you are going to see the Liberal Reader out at next year's town hall meetings, howling and stamping my feet and calling everyone in sight Nazis.

We've heard a lot about the "anger" of reactionaries in recent months:

When the hell are we going to hear something about the anger of those of us who want no one in your family EVER to go be refused decent health care, whether they are rich or poor?

Nick| 9.20.09 @ 12:22AM

Marxist Reader,

Just send me a check, OK?

Brad Hamm| 9.19.09 @ 1:13PM

Given the current state of U.S. it is not surprising that the gov. will try tax whatever they can to pay for this "reform." I wouldn't be surprised to see new proposed legislation that some how figures out a way to tax for the air the breathe!

logic 101| 9.20.09 @ 7:39PM

Liberal reader,
No one is denied care now. Destroying the system we have will help no one. If 85% of people are happy with their care, why can't we just buy catastrophic (hospitalization) for the uninsured and let everyone be? Insisting on taking away my liberty means the solution is not workable. We object to this incompetant reorganization of the system we rely upon for our lives.

Liberal Reader| 9.21.09 @ 12:28AM

logic 101

Actually, your logic is not half bad. However, some of the facts with which you are working aren't entirely accurate. So, your conclusions are a little askew.

First 85% of people are not "happy" with what they have.

85% of people would prefer what they have to nothing -- which is logical.

Now, most people don't fully understand a) how much their health care costs them; and b) how close they are to losing coverage.

Costs are going up too fast. Costs are dragging down small businesses; causing bankruptcies; preventing people from moving or changing jobs; preventing people from starting businesses. Medical costs are a DRAG on the economy.

Our competitors in Europe pay HALF what we do and have better results.

Our system is sick and needs urgent care.

Faffnir| 9.21.09 @ 7:13AM

I fail to see why it is the business of anyone else to provide insurance for me. I also question whether you understand the very great difference between health INSURANCE and health CARE. As P.J. O'Rourke rightly observed "If you think health care is expensive now, wait 'till you see what it costs when it's free." Milton Friedman, who I'm quite sure you have never read, was correct in his views that to get the cost of INSURANCE under control, you need to remove the regulations, both Federal and State that unnecessarily drive up the cost. You next need to sever the link whereby this insurance is provided by employers. If each individual was allowed the freedom to choose his own coverage, for his own circumstances, (as is done with home owners, auto or life insurance) you would see prices tumble. You make no rational case for why it is the responsibility of the taxpayers to provide a service that you ought to be buying for yourself. Oh, that's right: then the suite of goods and services that comprise health CARE will be "free".
You are aware that there ain't no such thing as a free lunch? The current system is not "broken". It has been hobbled by foolish politicians for short-term political gain and long-term power over YOUR life. Are you willing to give fools like Pelosi, Reid and the late, un-lamented Kennedy that mucj control? I am not.

coolpete| 12.7.09 @ 7:27AM

If each individual was allowed the freedom to choose his own coverage, for his own circumstances, you would see prices tumble

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coolpete| 12.9.09 @ 2:59PM

First 85% of people are not "happy" with what they have. so true indeed!! i would vote for more . .

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coolpete| 12.10.09 @ 5:15AM

If each individual was allowed the freedom to choose his own coverage, for his own circumstances, you would see prices tumble.

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coolpete| 12.11.09 @ 12:27AM

Given the current state of U.S. it is not surprising that the gov. will try tax whatever they can to pay for this "reform."

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abril| 12.11.09 @ 4:46AM

this post is very helpful thanks a lot for the sharing

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wade| 12.13.09 @ 12:43PM

The medical device industry is trying by hook or crook to avoid a $4 billion a year tax proposed by Sen. Max Baucus as part of the healthcare reform effort.

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More Blog Posts by Philip Klein

http://spectator.org/blog/2009/09/18/baucuss-tax-on-medical-innovat

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