IRs Proposes Regulations on Taxable Medical Devices

Please NOTE that "I" am the one who:
Enlarged the text that I wanted to make sure you did NOT miss.
Added the smart a_s comment in red.

The Internal Revenue Service has issued proposed regulations to provide guidance on the excise taxes imposed on the sale of medical devices under the health care reform law.

The proposed regulations in REG-113770-10 affect manufacturers, importers, and producers of taxable medical devices, and have been eagerly awaited by them. They come at a time when medical device makers have come under scrutiny in Congress for overcharging health care providers and providing little transparency into the cost of the devices, while insisting on “gag clauses” to hide the price of the devices.
Duh, is that a surprise to anyone?

The health care reform law added Section 4191 to the Tax Code, imposing an excise tax on the sale of certain medical devices by the manufacturer, producer, or importer of the device in an amount equal to 2.3 percent of the sale price. It applies to sales of taxable medical devices after Dec. 31, 2012.

If I understand it correctly, I'm not excited. The providers will simply pass the added cost on to us, the consumer.

Oh, yes. The government is concerned about the medical mafia ripping us off.

Solution: Add an extra tax to be paid for by the consumer.

Want to bet that the medical mafia uses this tax as an excuse for why they keep raising the rates we pay them? And that they will use it to excuse raising their rates much more than the 2.3%?

Ya ever try to hold up one finger with frog hands?

Aw shucks, my government screws me yet again. Pardon me if I don't "get it", the value in taxing medical devices helping patients in any way. It doesn't even put money in the pockets of the insurance companies who support our government politicians. Is an "excise tax" the same thing as a "VAT" (value added tax)???

Slinky wrote:Is an "excise tax" the same thing as a "VAT" (value added tax)???

From Wikipedia:
Excise tax in the United States is an indirect tax on listed items. Excise taxes can be and are made by federal, state and local governments and are far from uniform throughout the United States. Excise taxes are collected by the producer or retailer and not paid directly by the consumer, and as such often remain "hidden" in the price of a product or service, rather than being listed separately. This is thought to explain their appeal to many politicians.

There used to be a tax on excessive profits when dealing with the US Government but some how that went away. The rule was you could make up to 25% profit but the excise if you had 25.1% markup would be so high that that you would have made more money if your markup was only 20%.