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Yesterday, St. Jude Medical Inc. announced that it's laying off 300 employees, including 80 in Minnesota.
The company said it hopes to slash $50 to $60 million in costs next year -- almost the exact amount of additional taxes it'll pay thanks to a new medical device tax that goes into effect in January. Don't think that connection is lost on Republicans.
[jump] The revenue generated from the tax will help the federal government pay for Obama's Patient Protection and Affordable Care Act -- aka, Obamacare.
From the Star Tribune:
Thomas Gunderson, a senior analyst with Piper Jaffray & Co., said there appears to be a strong connection between the layoffs and reorganization and fallout from the new medical device tax. Starting in January, medical device makers will have to pay a 2.3 percent excise tax on products they sell. The tax is expected to raise $2 billion a year to help pay for President Obama's Patient Protection and Affordable Care Act. The tax is expected to cost St. Jude about $61 million in 2013.Indeed, there's more to this story than 'Obamacare took 'er jobs!' Little Canada-based St. Jude's acknowledges that its 2012 sales are expected to decline about one percent from last year. The company is also dealing with the recall of a wire used in defibrillators that contributed to a six percent drop in cardiac rhythm devices.
"They have to cut expenses to make up for the medical device tax," Gunderson said. "Although some of this already was in the works."
But as you'd imagine, Republicans didn't concern themselves with the nuances. A Republican St. Jude's employee living in South Carolina offered up this analysis:
FACT - due to medical device tax and Obamacare my company just laid off 300 people today.
From the op-ed:
[I]n a mad rush to find additional revenue to support the law's trillions of dollars in new spending, the president and his Capitol Hill allies enacted this medical device tax despite the predictable impact on economic growth, job creation and health care innovation. What the proponents of the law fail to understand is the basic concept that if you tax something more you get less of it. If we want to be a nation leading the charge of new health care advancements to treat and cure diseases, then we must repeal this tax...The layoffs certainly seem like a promising anti-Obama and anti-Obamacare talking point for both Romney and local Republicans as they hit the campaign trail, don't they?
[A]s America's economy struggles to regain footing, this tax would deliver a staggering blow. As many as 43,000 jobs could disappear, as well as $3.5 billion in worker wages and benefits...
ObamaCare as a matter of policy is unsound and must be repealed. The elimination of the medical device tax will benefit our economy, workers, job creators, patients, and families that depend on the good jobs, high wages, and innovative medical products that this industry creates.