It is becoming clear that after Jay Chen absorbed his meaningless primary loss against Ed Royce’s $2.1 million onslaught of mailers — and then retooled and kept on gathering steam and coming right at him — Ed Royce completely (and only somewhat surprisingly) lost his composure.
Dr. Strangeroyce: “Because of the automated and irrevocable decision-making process which rules out human meddling, the Making Stuff Up machine is terrifying and simple to understand… and completely credible and convincing. “
He had $2 million left to spend (unless the big banks have dug deeper to help elect the man who three months ago was assuring everyone that he had things in the bag) and Chen was closing in on nearly $700,000 of his own. That would be enough to tell his own story. Plus, Chen had assembled a small army of excited young volunteers, who outclassed Royce’s highly paid mercenaries. (This is how you know that Ed Royce is not actually “in the Tea Party” in any meaningful or the least bit admirable way. His “grass roots” are plastic.) So what’s a poor rich guy to do?
“Desperate Ed,” it is now clear, went into full-scale panic mode after Chen refused to wilt after the barrage of spending in the primary. He apparently sent out an S.O.S. to his party: “SEND ME PEOPLE WHO KNOW HOW TO LIE!” Residents in CA-39 are now begin to enjoy the fruits of those efforts. Big lies. Stupefying lies. Unbelievable lies. Already discredited lies. Lies sometimes so bad that they make you wonder why someone even bothered to tell them.
This is a real problem for me, a both a political blogger and a candidate, because I’ve got a lot of things to do and even more things to cover. I haven’t even written about Irvine and Costa Mesa recently! We still need to cover OCTA for three more weeks. I’ve got twin scandals in South County with Diane Harkey and Mimi Walters; I’ve got the Lowenthal-DeLong race and Quirk-Silva against Norby; I’ve got intraparty fratricide in Santa Ana, and the most confusing City Council election ever in Anaheim, and the titanic battle for the very soul of Fullerton. Do you think I have time to spend every day for the next five weeks slamming Desperate Ed for his audacious lies? I DO NOT!
And yet — the man gives me no choice! Take what was reported recently on Jay Chen’s website. Desperate Ed’s new attack on Jay Chen (for which he found the only bad photo of Chen that I’ve ever seen, other than those I’ve taken personally), tacked onto the long discredited “Stealing $715 Billion from Medicare” fable — a LIE LIE LIE that you can read about HERE HERE HERE from factcheck.org, is that Jay Chen allegedly favors … a new tax on wheelchairs!
Chen supports a new tax on medical devices seniors use – even wheelchairs. (Source: U.S, News & World Report, July 10, 2012).
ROBBING Medicare Funds and TAXING Wheelchairs.
My tipster tried to look up the source for this allegation and couldn’t find it. It plucked a string in my memory, though. I had heard of this somewhere before. With the help of Google, after several arduous seconds, I found it.
Patients Will Not Pay a Wheelchair Tax Under Obamacare. By Edward Lamb, About.com Guide, August 29, 2012
The PPACA does impose an excise tax on medical device manufacturers. That means only companies that produce health equipment will pay the levy beginning on Jan. 1, 2013. Patients are not being directly taxed on items defined under federal law as durable medical equipment, prosthetics, orthotics and other supplies, or DMEPOS.
To quote the official Internal Revenue Service’s FAQ on the medical device excise tax:
Q. What is the medical device excise tax?
A. The medical device excise tax is a tax on the sale of certain medical devices by the manufacturer, producer or importer of the device.
Q. Who is responsible for reporting and paying the medical device excise tax?
A. The manufacturer or importer of a taxable medical device is responsible for reporting and paying the tax.
Q. Will individual consumers be subject to any reporting or recordkeeping requirements?
A. No action is required by individual consumers.
The IRS also links to a proposed that quotes directly from the Obamacare law in specifying that
“taxable medical device” does not include eyeglasses, contact lenses, hearing aids, and any other medical device determined by the Secretary to be of a type that is generally purchased by the general public at retail for individual use.
In short, neither pharmacies nor patients will be taxed on DMEPOS under the PPACA. MRI machine makers will undoubtedly pass the 2.3% excise tax on to a hospital purchasing a new diagnostic device, but who would that scare?
But why should you believe just one article? Have another! Here’s one from factcheck.org:
First the Republicans claimed President Obama’s health care law taxes “sick puppies,” and now Mitt Romney’s campaign claims the law taxes “wheelchairs.” Wrong again.
At issue is a new 2.3 percent excise tax on certain medical devices. The tax is set to kick in next year to help offset the cost of expansion of health coverage for the uninsured in the new health care law. According to the Romney ad, the law will mean “taxing wheelchairs and pacemakers.” The ad shows a picture of a manual wheelchair.
But Treasury Department officials say that under the proposed rules being finalized by the IRS, wheelchairs — both manual and motorized — will be exempt from the new tax on medical devices.
Ordinary wheelchairs would fall under the “retail exemption” in the proposed rules, an administration official said. According to the Internal Revenue Services’ “Notice of Proposed Rulemaking” under the retail exemption:
IRS Notice of Proposed Rulemaking: A device will be considered to be of a type generally purchased by the general public at retail for individual use if it is regularly available for purchase and use by individual consumers who are not medical professionals, and if the design of the device demonstrates that it is not primarily intended for use in a medical institution or office or by a medical professional.
Ordinary wheelchairs — like the one pictured in the Romney ad — are regularly purchased retail by the general public for individual use, and therefore fit that exemption, a Treasury official said. And customized, motorized wheelchairs will be exempt under the rules’ “safe harbor” provision, which states that “customized items” that are “generally purchased by the general public at retail for individual use” would be exempt from the tax. A public hearing on the rules was held in May, but Treasury has not yet finalized and released the rules.
Still not satisfied? Just one more:
The ad’s claim that Obama’s health care law taxes wheelchairs is questionable.
The tax actually applies to medical device makers, not consumers directly. It helps pay for the health care overhaul’s expansion of health care coverage to 30 million Americans. The tax is aimed at U.S. sales of medical devices used chiefly by doctors and hospitals, such as pacemakers and CT scan machines. Exempted are consumer items like eyeglasses and kits for many blood tests that people can perform on themselves, as well as other medical devices yet to be specified.
The Obama administration says old-fashioned wheelchairs and the newer powered ones will also be exempt from the tax under proposed regulations being finalized by the IRS.
I’ll stop there; I have to save up energy for the next bogus attack ad. One thing is clear for voters:
YOU CANNOT TAKE A SINGLE CLAIM MADE IN AN ED ROYCE AD
OVER THE NEXT FIVE WEEKS AT FACE VALUE. IT IS VERY LIKELY
EITHER GROSSLY MISLEADING OR A PURE FABRICATION.
I know that this is hard for people to accept — but if we can teach our children not to take candy from strangers, we can also teach adults not to take fantastical lies from desperate politicians seriously.
The most positive thing I can say about Ed Royce’s ad is this: at least it’s an unoriginal cookie-cutter attack from the national party — the predictability of which allows Chen to know pretty much what steaming scoop of hooey Desperate Ed is going to serve to the voters next. More along these lines, alas, no doubt to come.
And that’s how you write an attack piece, folks. No nonsense, no truth stretching, effective, and damning. Take notes, Mr. Chen (and staff.)
“No nonsense”? I resent that! Some of the best stuff here is playful nonsense — but at least it’s self-aware nonsense intended to be amusing. (Unless, that is, Desperate Ed really did put out the message “SEND ME PEOPLE WHO KNOW HOW TO LIE!” to his party, in which event I stand corrected.)
I stand corrected.
“Obamacare’s Medical-Device Tax Kills Patients, Not Just Jobs”
http://www.forbes.com/sites/aroy/2012/06/06/obamacares-medical-device-tax-kills-patients-not-just-jobs/
Twaddle from an interested player.
“Evan Bayh: ObamaCare’s Tax Raid on Medical Devices.”
“The industry that gave us stents, replacement joints and defibrillators will get a dose of bad fiscal medicine.”
“Mr. Bayh, a Democrat, is a former governor and U.S. senator from Indiana. He is a partner at the McGuireWoods law firm, which represents several medical-device companies.”
“Even Elizabeth Warren, the Democratic Senate candidate from Massachusetts and a staunch progressive, has now come out in favor of repeal.” (Medical device tax)
The bad economics is explained in the article, link below.
http://online.wsj.com/article/SB10000872396390444620104578012281306687070.html
So a conservative Democratic (and disgrace to his Dad) lobbyist for medical device companies doesn’t like the policy. How persuasive. The Obama Admin has explained that what they lose in taxation will be more than made up in volume — because now more people will be able to afford the pacemakers and MRI machines because they will have insurance. Not that the WSJ would tell you that.
We agree, though, that the tax isn’t on wheelchairs, don’t we? We agree that Royce was making that up, right?
The Obama Lie: The Medical Device industries will make up the tax costs in more sales volume.
With full knowledge, – Obama knows it’s a lie because he also knows that the medical device tax is not on the company’s profits, – but rather on its sales, – regardless if the company is profitable or not.
For example:
“It took Massachusetts-based Abiomed 30 years to show a profit building specialized heart pumps. During that time, the company has grown from 10 to 440 employees, but the company risks being back in the red if the excise tax goes into effect Jan 1, 2013, as planned.”
“Abiomed reported about $1.5 million in profit on the $126 million in sales the company realized during fiscal 2012. Had the medical device tax been in effect then, the company would have had to turn in every penny of its profits, plus another $1.4 million or so.”
“Medical device companies argue theirs is an industry with many small companies shouldering large research-and-development budgets and competing for elite medical and scientific minds.”
Abiomed’s CEO, Mike Minogue testified before the House Committee on Small Business that “the amount Abiomed will pay for the excise tax is the equivalent of 15 percent of the company’s research and development budget, 10 percent of its employee head count, or almost double what it spends on health care for hundreds of employees.”
“This tax will affect jobs. It will mix health care reform with tax policy and it will be extra detrimental to companies that are not yet profitable and need every dollar to survive,” he said.”
Note : “The House voted to repeal the tax in June, 270-146, but the repeal has since stalled in the Senate.” (190 Democrats in 112th Congress)
http://hotair.com/archives/2012/07/30/surprise-obamacare-medical-device-tax-killing-jobs-in-the-industry/
• Obama’s Medical Device tax will force companies that are not yet profitable to go out of business. Cutting Research & Development is not an option.
• Medical Devices save lives, – reduce the number of surgeries, – and reduce health care costs.
If Obama were honest he would grow a “Hitler Mustache”
And, again — that is prior to the market expansion that accompanies near-universal coverage.
I’ll tell you what, though — because Obama is not actually the type to need to grow a “Hitler mustache,” my guess is that the implementing regulations would allow companies in that position to avoid the tax for a while if in fact PPACA doesn’t already do so, because Obama seriously has no interest at all in putting such companies out of business and has shown flexibility and restraint in the past.
One of the issues with all of these confusing and technical taxes is what they apply to and what they don’t apply to. Often, it can take years to figure it all out and even then it is up to interpretation. If it can’t easily be explained in the actual law, then one should really consider the wording.
If a medical device it taxed, it seems that the consumer will be the ultimate payer of the tax- although not explicitly, but it would be passed through to them in the way that most costs are also passed through. Misleading ad though based on the prevailing thought that wheelchairs would not be subject to the tax (but, who knows…interpretation of the rules- even by the IRS, otherwise they would have already come out with Regs, which I don’t think they have yet).
If they make up in volume what they lose in margin (and more), why would it be passed on to consumers, presuming a competitive market?
The free market concept would indicate that a selling price is often not so much influenced by cost as much as the willingness of one party to sell at a certain price which impacts what others would charge assuming that the product is some what a commodity and comparable across producers. However, understand that in medical devices, often the barriers to entry are so high that there are very often limited producers which will limit the free market concept…for example, all producers will raise prices due to the additional tax thereby essentially passing the tax through.
Additionally, often medical devices are not sold in such mass quantities that the cut price (or keep prices stable despite rising costs) and make it up on volume will not always come to fruition.
The key is the details of the product and the assumption of a competitive market. The real answer to “why” is likely because they “will”. Most companies look at an excise tax as cost and will simply price it in…until, someone decides to try to reduce price and take market share.
The two devices (aside from wheelchairs) most often mentioned in the articles are pacemakers and MRI machines. I presume that there’s a robust market for both (and demand is about to expand, thanks to Obamacare.)
If you’re right that there’s de facto collusion among manufacturers, leading to a market failure, then that may call for a different sort of solution.
In cases of less common medical devices, then yes — the tax may be passed on to consumers (in the aggregate) through hospitals. But there you do have some competition and the impact on individual consumers of health care is likely to be mild. Again, hospitals know that they’re getting a good deal here.
To: Greg Diamond, & Boutwell,
You need to ask yourself this question: Why would a minimum of 30 House Democrats vote to repeal the tax on medical devices during an election year?
“The House voted to repeal the tax in June, 270-146, but the repeal has since stalled in the Senate.” (If all 240 Republicans voted for repeal then 30 Democrats also voted for repeal).
http://hotair.com/archives/2012/07/30/surprise-obamacare-medical-device-tax-killing-jobs-in-the-industry/
The Answer:
A minimum of 30 House Democrats understood that the Medical Device Tax was NOT on the Company’s profits, (If it were an extra tax on the profits then the Company might be able to recoup through greater volume).
Abiomed took 30 years to show a profit building specialized heart pumps. Obamacare’s medical device tax is an excise tax, (an additional tax), on Abiomed’s sales of its specialized heart pumps to hospitals. If this medical device company was living under Obama’s excise tax then it never would have become a profitable company; and would have gone out of business 10-20 years ago; the specialized heart pump would not be available; patients in need of the pump would be dead. (Details in the article).
The purpose of Obama’s excise tax is to stifle medical device advancements and thereby kill people.
It’s probably because they’re either conservative or playing politics (possibly based on local factors), not because only 30 House Democrats shared your understanding of this law.
I know that actual governance isn’t your forte, Robert, but these sorts of unintended effects of laws are generally smoothed out in regulations. If Abiomed really had the goods in its 30-year wait for a profit — we can agree that that’s highly atypical, right? — it would be less likely to have gone out of business than to be sold to a larger company that would have been able to wait for it to grow.
No argument here…and yes, I understand that it is a tax on the revenue and not profits. It is a big difference and can have a very harming impact on business…albeit one that with planning can generally be worked around. I doubt that only 30 D’s understood that it was a revenue based excise tax compared to a net income tax (i.e. even if you have a billion dollar loss, you still pay the tax)- most are pretty astute even if we don’t agree with them.
Regardless, if there is enough volume in sales, then they can recoup the cost of the excise tax, although it is a circular calculation (i.e. sales go up, tax goes up, profit go around and around…).
I do see that the prices would flow through to the users though- the end user often will be the payer of the tax as it will work into the price. Obviously there are exceptions for super competitive markets where a vendor is trying to make market share and/or force another company out of business with low prices that are unsustainable for smaller startup w/o a boat load of money in reserves.