By Dustin Hurst | Watchdog.org
IDAHO FALLS, Idaho – An economist from the George W. Bush White House told a House committee Wednesday morning that a key tax on medical devices could kill thousands of jobs.
Diana Furchtgott-Roth, the former Bush aide, told lawmakers that the medical device tax, a 2.3 percent surcharge on items like heart valves, joint replacements and even wheel chairs, could force American manufacturers to ship jobs oversees to avoid the levy.
Testifying before the Energy and Commerce Committee, she said that a 10 percent shift in production overseas would cost up to 64,000 jobs and a 30 percent shift would cost up to 146,000 jobs.
Furchtgott-Roth, senior fellow at the Manhattan Institute, predicted that firms facing the tax would “move production offshore.”
The tax is particularly devastating because business must pay it even if they don’t turn a profit. A Memphis, Tenn., employer shed in early February 100 jobs due to the tax. Chris Butler over at Tennessee Watchdog wrote about the job losses here.
Of course, that’s not the only bad news Obamacare’s caused in the last couple weeks.
On top of Five Guys announcing that their delicious burgers will cost more when the law is fully implemented, a key report from the Federal Reserve delivered earlier this month says that some employers are planning layoffs or are reluctant to hire more staff because of health care reform. The health measure might also be slowing sales, the report notes.
The Beige Book, which paints a picture of the economy by drawing on the contacts maintained by regional Fed banks with their local business communities, was prepared this time around by the Kansas City Federal Reserve. It’s not usually considered to have any partisan tilt, although obviously the views it reports are those of the business sector (rather than, say, the labor unions).
“Employers in several Districts cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff,” the report says.
The Richmond Fed reports that employers in its area continued to point to the Affordable Care Act as “reasons for planned layoffs and reluctance to hire more staff.”
The Dallas Fed contacts “noted concern that client companies are hiring the absolute minimum to get by due to uncertainty about the Affordable Care Act.”
It’s not just hiring that is being hurt by Obamacare, according to the Beige Book. Sales are also.
“Many District contacts commented on the expired payroll tax holiday and the Affordable Care Act as having restrained sales growth,” the report says.
Obamcare a bad prescription for jobs? But Nancy Pelosi told us that the bill would create 4 million jobs.
Contact: Dustin@Watchdog.org or @DustinHurst via Twitter.