For Release: April 24, 2013
Contact: Judy Kent at (703) 759-7476 or [email protected]
Medical Device Tax Kills Jobs; Raises Health Care Costs
General Electric CEO Jeffrey Immelt to Be Asked at Shareholder Meeting to Endorse Plan to Repeal the Tax and Replace Lost Revenues with an End to Federal Wind Subsidies
GE Projected to Lose $100-$150 Million a Year if Tax Not Repealed, But Company Manufactures Wind Turbines
New Orleans, LA / Washington, D.C. - At today's annual meeting of General Electric shareholders in New Orleans, Justin Danhof, Esq., director of the National Center for Public Policy Research's Free Enterprise Project, plans to suggest to GE CEO Jeffrey Immelt that the corporate giant endorse a plan to repeal ObamaCare's medical device tax that pairs the repeal with an end to taxpayer subsidies for wind energy.
General Electric manufactures both medical devices and wind turbines.
"Former House Speaker Nancy Pelosi (D-CA) urged her colleagues to pass ObamaCare, saying 'we have to pass the bill so you can find out what is in it.' From health care exchange delays, to I.R.S. uncertainty regarding ObamaCare penalties, to the Obama Administration's admission that health care premiums will increase for many Americans, 'what is in it' is turning out to be one bad idea after another," said Danhof. "And the innovation and economy-crushing medical device excise tax is just another of ObamaCare's market evils. GE has been lobbying to stop the excise tax, and rightfully so. One way to do that without sharply increasing the national debt is to magnanimously join the movement to end anti-competitive wind subsidies."
According to the Milwaukee Business Journal, the 2.3 percent medical device excise tax contained in ObamaCare could cost GE Healthcare Services between $100-$150 million annually. This new burden has already led to job losses in the health care industry and is threatening future investment in research and development. Support for repeal of the tax has come from ideologically diverse lawmakers such as Senators Al Franken (D-MN) and Lamar Alexander (R-TN).
The National Center has endorsed a plan to repeal the medical device tax while pairing the repeal with an end to wind subsidies, as detailed in its new National Policy Analysis paper, "Let's Take the Wind Out of ObamaCare's Medical Device Tax," by Senior Fellow David Hogberg, Ph.D.
The plan calls for repealing the medical device tax and making up for much of that tax's anticipated revenue by declining to review federal wind power subsidies when they expire at the end of 2013.
Danhof suggests that wind industry advancements could accelerate if federal handouts for wind power were removed.
Patrick Jenevein, CEO of the Dallas-based Tang Energy Group, recently explained in a Wall Street Journal editorial that Washington's current grant-and-loan-seeking culture creates perverse incentives for wind energy firms. Jenevein wrote, "as long as these subsidies and tax credits exist, clean-energy executives will likely spend most of their time pursuing advanced legal and accounting methods rather than investing in studies, innovation, new transmission technology and turbine development."
The National Center has concluded that repealing the medical device tax while ending the wind production tax credit would lead to a net increase in U.S. jobs. Nearly a fifth of U.S. medical device manufacturers expect to lay off employees because of the medical device tax. Some medical devices companies, such as Stryker, Smith & Nephew and Zimmer Holdings, have already laid off employees as a result of this tax. Meanwhile, a study published in March jointly by the American Energy Alliance and the National Center found that employment benefits of wind subsidies have been grossly overestimated by lobbyists for wind subsidies.
A copy of Danhof's question at the shareholder meeting, as prepared for delivery, can be found here.
The National Center for Public Policy Research is a General Electric shareholder.
The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than 4 percent from foundations, and less than 2 percent from corporations. It receives over 350,000 individual contributions a year from over 96,000 active recent contributors. In 2012-13, zero percent of its contributions came from the fossil fuel industry or related foundations.
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