Kiss off 1600 jobs, thanks to 1600 Pennsylvania Avenue:
The people at Zoll Medical Corporation saw a ray of hope in January when Scott Brown was elected senator from Massachusetts. Located in Chelmsford, 30 miles outside Boston, Zoll is the nation’s leading manufacturer of heart defibrillators, which save thousands of heart attack victims each year. Back in January, as the Senate race was raging, both House and Senate Democrats wanted to impose a crippling new tax on the makers of medical devices, Zoll included, to help pay for Obamacare.
The total tax on the industry would be about $2 billion a year, or $20 billion over the next decade. Companies watched nervously as lawmakers pushed ahead, first the House and then the Senate. But then Brown was elected on the promise to be the crucial Republican vote to stop health care reform. For Zoll, things were looking up.
Not anymore. The bill passed by the House Sunday night contains a particularly damaging version of the $20 billion hit for the medical device industry, meaning Zoll and other medical device makers could well be headed for hard times.
“We believe that the tax will cost us somewhere between $5 million and $10 million a year,” says Richard Packer, Zoll’s chairman and chief executive officer. “Our profit in 2009 was $9.5 million.”
That would be a devastating blow. Zoll employs about 1,800 people. Roughly 1,600 of them are in the United States, and about 650 of those are in Massachusetts. Once the new tax kicks in, that could all change. “We can’t run this company at a break-even or a negative rate,” says Packer, “so we will be forced to look at alternatives.”
Alternatives such as shipping those jobs overseas, passing on higher costs to customers, or just going out of business because the new taxes make staying in business more trouble than it’s worth.
I’ve said it before and I’ll say it again: raising taxes in a recession is one of the worst things a government can do and is guaranteed to choke off the job-creating energy of any recovery. Zoll is just the first drop of a coming unemployment storm, as businesses all rethink their hiring and even the country within which they do business. The Progressives’ fanatical desire to remake us into a European social democracy will also have the result of giving (lower) levels of growth and (higher) levels of long-term unemployment, and all for a health-care reform that will not do a damned thing they promised.
Genius. Sheer frakking genius.