It’s another edition of #ConnectTheDots !
First President Donald J. Trump tweeted at 7:03 AM
Lightweight Senator Kirsten Gillibrand, a total flunky for Chuck Schumer and someone who would come to my office “begging” for campaign contributions not so long ago (and would do anything for them), is now in the ring fighting against Trump. Very disloyal to Bill & Crooked-USED!
— Donald J. Trump (@realDonaldTrump) December 12, 2017
And the message was clear … “Only if your mind is in the gutter would you have read it” that the President’s tweet was anything other than “begging” political contributors is the norm in Washington.
And so it was that “Representative” Erik Paulsen tweeted at 5:21 PM
This tax should be eliminated and fully repealed, but short of that, we should at least suspend this onerous tax for another five years
— Rep. Erik Paulsen (@RepErikPaulsen) December 12, 2017
Hmmm … a rejection of the #DrainTheSwamp theme that candidate Trump campaigned on … but instead “Representative” Paulsen tweets a call to action …. not for the Republican-controlled House but to his donors. The message is clear … (as stated in his press release :
In the 114th Congress, Congressman Paulsen helped pass a two-year suspension of the medical device tax with bipartisan support. Unless action is taken, the medical device tax will go back into effect on January 1, 2018. This year, Congressman Paulsen introduced the Protect Medical Innovation Act to permanently repeal the medical device tax. This legislation has broad bipartisan support with 260 cosponsors.
Hmmmm … for the self-described #MathGuy, if it takes 218 votes to pass legislation and there are 260 cosponsors, do the math … demand a vote !
It wasn’t like the House hasn’t been working on tax reform … right ?
It wasn’t that “Representative” Paulsen can’t ask Speaker Ryan for a vote on his bill (yeah, he did … writing on October 24th urging the Speaker “to work with the Committee on Ways and Means to ensure inclusion of medical device tax relief in legislative vehicles being considered by the House before the end of the year.”
Oh, and guess who serves on the Ways and Means Committee ?
So rather than include a full repeal of the EXCISE tax in “Tax Reform and Jobs Act” (Fun Fact … reform of excise taxes collected on beer, wine, etc has been included in the Senate bill), “Representative” Paulsen offers H.R. 4617 … a five year extension of the suspension of the medical device EXCISE tax.
Gosh, ya gotta hope that his donors see how they are being played … a full repeal means that they never have to make a contribution to another one of his campaigns … but if this is just reauthorized as a suspension of the payment due, every couple of years, “Representative” Paulsen can keep calling on them with his hand out.
Taxpayers oughta understand how the Medical Device EXCISE Tax impacts tax projections and fiscal budgeting.
Simply stated, during the time the EXCISE tax is suspended, the CBO doesn’t include those dollars in those years, but for the years, it is not suspended, it assumes those dollars will be collected.
Yep, it’s called “Washington Math” … something that a #FiscalFraud like the #MathGuy understands.
CBO presently assumes the Medical Device EXCISE Tax will generate revenues in :
2018 $1.4 Billion
2019 $1.9 Billion
2020 $2.0 Billion
2021 $2.1 Billion
2022 $2.3 Billion
2023 $2.4 Billion
2024 $2.6 Billion
2025 $2.4 Billion
Yep, the five year “suspension” will impact the national debt $7.4 Billion.
IF you are concerned about the national debt, don’t ya gotta realize that for two years, medical device companies pocketed the tax that was already factored into their product prices ?
Consider this, the amount of tax revenues collected in prior years :
2013 $1.837 Billion
2014 $1.980 Billion
2015 $2.100 Billion
Paulsen’s donors won when “Representative” Paulsen forced a two year suspension into a “must pass” budget bill in 2015 … so should the question be asked if his premise is correct that Research and Development would grow as would employment during the time that the EXCISE tax was suspended?
That is key … the suspension meant tax revenues (just a couple of billion dollars) did not flow into the US Treasury but instead remained with the industry to “invest” as they deemed necessary.
Thus, the obvious question, did companies hire more American workers, invest in R&D, or purchase competitors, issue stock buybacks or reward executives ?
“Representative” Paulsen hasn’t offered any analysis of what has happened … but he might be interested in this study … that found two important results:
— Analyzing the Compustat data from 2006 to 2015, the ACA medical device tax was reduced for R&D expenditures by about $36 million
— the excise tax significantly increased international sales revenue and the number of international markets for the medical device manufacturers because they can avoid the excise tax for international sales.
OK …. so according to this study, the R&D did not go down significantly during the time the EXCISE tax was collected.
Second, let’s remember that the EXCISE tax is truly a pass-through tax onto American consumers (thus there is an incentive for domestic production and exports). In this case, exporting looks
much more attractive to a manufacturer than it did prior to the Medical Device EXCISE Tax. The exemption gives incentives to medical device companies to allocate a piece of their fixed costs to foreign market research.
The suspension was never justified … it was strictly a case of a special interest demanding a tax cut … and a “Representative” that was eager to accept their campaign donations to push legislation.
For those who heard the Trump message that Washington was controlled by special interests, well look no further than Minnesota’s Third District … they have their man in Washington … and it’s our rising debt that is being ignored by a so-called fiscal conservative #MathGuy.
#ConnectTheDots … in 2018, #FlipMN03.