[madgoat]

Originally Posted by drgonzo

The inelasticity coupled with expected increased demand = companies making money regardless of the taxation = this is all bull**** cover that the OP is buying hook, line and sinker.

1)any demand increase(shifting right) will be accompanied by supply decrease due to tax(shift left), so its impossible to quantify the effect til it actually happens.
2)it still makes moving operations overseas/importing med supplies more desirable

[drgonzo]

Originally Posted by madgoat

1)any demand increase(shifting right) will be accompanied by supply decrease due to tax(shift left), so its impossible to quantify the effect til it actually happens.

Taxation isn't going to reduce supply, why would it reduce supply? Demand will be increased by a separate force.

Originally Posted by madgoat

2)it still makes moving operations overseas/importing med supplies more desirable

How?

[madgoat]

Originally Posted by drgonzo

Taxation isn't going to reduce supply, why would it reduce supply? Demand will be increased by a separate force.



How?

I don't mean to offend you, but this is like 2nd week of micro 101 stuff. Even without any sort of economics backround, somebody like you who has posted in politics about economic issues for years should know this by now. http://www.investopedia.com/exam-gui...#axzz229l7SbOZ

And 2, because if you increase the cost of producing things in the US, it means that producing things outside the US becomes relatively cheaper.

[drgonzo]

Originally Posted by madgoat

I don't mean to offend you, but this is like 2nd week of micro 101 stuff. Even without any sort of economics backround, somebody like you who has posted in politics about economic issues for years should know this by now. http://www.investopedia.com/exam-gui...#axzz229l7SbOZ

You only insult yourself by trying to apply 2nd week micro 101 concepts to an obviously more complex situation.

Originally Posted by madgoat

And 2, because if you increase the cost of producing things in the US, it means that producing things outside the US becomes relatively cheaper.

The cost of production is not changing.

[madgoat]

Originally Posted by drgonzo

You only offend yourself by trying to apply 2nd week micro 101 concepts to an obviously more complex situation.



The cost of production is not changing.

I'm not going to bother arguing with you about the first comment i'll just let it sit there for everyone else to see.

And from reading OP, i assumed that the tax was applied to med devices made in US but not overseas. If that's wrong and it applies to all med devices, then yea outsourcing shouldn't be a problem.

[Status Quo (Banned)]

Originally Posted by drgonzo

Indeed, which is where the fact that PPACA is expected to increase demand for medical care and, thus, demand for medical devices, comes in.

False. This would be true if there was a penalty for not getting coverage until you're sick, but there isn't.

[drgonzo]

Originally Posted by madgoat

I'm not going to bother arguing with you about the first comment i'll just let it sit there for everyone else to see.

Please, do argue. There are other dynamics involved here. And you can make a pretty good attempt at quantifying the subsidy shift, based on the expected increase in utilization of healthcare. I'm pretty sure that's how they arrived at that percentage.

Originally Posted by madgoat

And from reading OP, i assumed that the tax was applied to med devices made in US but not overseas. If that's wrong and it applies to all med devices, then yea outsourcing shouldn't be a problem.

http://www.pbnation.com/showthread.p...0#post76319480

[madgoat]

In the most basic way I can I'll try to explain why an excise tax lowers supply for you.

Lets say the tax is t, q is quantity and the selling price of the good is , when the tax is instituted, the actual revenue a company gets is reduced from pq to (p-t)q, therefore they no longer want to produce the good at the equilibrium p and q and the supply curve shifts left. This causes the equilibrium quantity to decrease and the price to increase, coupled with a possible increase in demand though, its impossible to say(until it happens) what will actually transpire. All this happens independent demand elasticity. Demand elasticity does however help determine who bears the brunt of the deadweight loss due to the tax, which in this case would likely be the consumers.

[Status Quo (Banned)]

Don't try madgoat. You're right but fact remains his original claim is wrong based purely off what Obamacare accomplishes.

[drgonzo]

Originally Posted by madgoat

In the most basic way I can I'll try to explain why an excise tax lowers supply for you.

Lets say the tax is t, q is quantity and the selling price of the good is , when the tax is instituted, the actual revenue a company gets is reduced from pq to (p-t)q, therefore they no longer want to produce the good at the equilibrium p and q and the supply curve shifts left by t. This causes the equilibrium quantity to decrease and the price to increase, coupled with a possible increase in demand though, its impossible to say(until it happens) what will actually transpire. All this happens independent demand elasticity. Demand elasticity does however help determine who bears the brunt of the deadweight loss due to the tax, which in this case would likely be the consumers.

Yeah you are stuck on your 2nd week micro 101 concept, one concept. But even by that solitary concept, your assertion is incorrect; you CAN say what will most likely transpire, that's pretty much what economists' jobs are. You can estimate the increase in demand. We certainly know demand isn't going to drop.

At any rate, none of this justifies what the companies are doing.

[Status Quo (Banned)]

No you can't estimate an increase in demand. The legislation makes it cheaper and easier for people to not sign up for health insurance until they're sick. It's everything democrats said it wouldn't be. they ****ed up by calling it a tax.

[madgoat]

Originally Posted by drgonzo

Yeah you are stuck on your 2nd week micro 101 concept, one concept. But even by that solitary concept, your assertion is incorrect; you CAN say what will most likely transpire, that's pretty much what economists' jobs are. You can estimate the increase in demand. We certainly know demand isn't going to drop.

At any rate, none of this justifies what the companies are doing.

What assertion? That this tax will lower supply and could be offset by an increase in demand? Thats the only assertion I'm currently making. What possible contention could you have with that? Other than just not understanding anything about economics.

[drgonzo]

Originally Posted by madgoat

What assertion? That this tax will lower supply and could be offset by an increase in demand? Thats the only assertion I'm currently making. What possible contention could you have with that? Other than just not understanding anything about economics.

Several things, first of all your overall casting of it as a net reduction in transactions. All estimates we have indicate an increase in demand, we have known this from almost day 1, this is why Obamacare has often been characterized as a corporate giveaway.

Second, your suggestion that the tax will cause a drop in supply, i.e. a supply-side change. That is not true, any supply change would be responsive to a demand drop (the basic fallacy of supply-side thinking). And since we are pretty sure demand is not going to drop but grow, that pretty much tosses the whole flawed line of thought out on its ear.

[madgoat]

Originally Posted by drgonzo

Several things, first of all your overall casting of it as a net reduction in transactions. All estimates we have indicate an increase in demand, we have known this from almost day 1, this is why Obamacare has often been characterized as a corporate giveaway.

Second, your suggestion that the tax will cause a drop in supply, i.e. a supply-side change. That is not true, any supply change would be responsive to a demand drop (the basic fallacy of supply-side thinking). And since we are pretty sure demand is not going to drop but grow, that pretty much tosses the whole flawed line of thought out on its ear.

no, its not. you're talking out of your ***. Qd=/D, supply shifts exist independent of demand. I wish LTK was here since I think you'd actually listen to him when he said you were wrong.

[Status Quo (Banned)]

I'm amazed that this is what Gonzo thinks formal econ is.

[licence_to_kill]

So is this actually true or is it just typical lobbyist bull****?

[Status Quo (Banned)]

If Gonzo's OPINION that this isn't true because of expected increases in demand for medical care/devices then yeah it's legit.

Why?

Because there shouldn't be expected increases in demand because all Obamacare did, besides passing less money and benefits off onto employees under employer-provided healthcare, was make it much, much easier to wait until you get sick/are in desperate need of healthcare and then sign up.

[Rapier7]

That's an overly simplistic view of business. Some companies try to pass on their costs to their consumers. Others trying to do so would kill their business. Depending on the specific good, company, and market, they'll try and cut costs on their end while maintaining the end user's experience at all costs.

For example, despite the record high Yen, Honda is currently selling the Fit subcompact at a loss here in the US while they transition Fit production stateside to reduce the volatility of earnings based on the USD-JPY exchange rate.

Medical devices are a bit different since it's really a B2B transaction. But increased costs could mean the difference between a hospital holding off on upgrading/replacing its current equipment or a nice, fat purchase order.

[madgoat]

Originally Posted by licence_to_kill

So is this actually true or is it just typical lobbyist bull****?

Would you please educate gonzo on what taxes do to supply? Apparently, he thinks I'm spewing partisan BS or something.

[custar]

Originally Posted by Rapier7

Medical devices are a bit different since it's really a B2B transaction. But increased costs could mean the difference between a hospital holding off on upgrading/replacing its current equipment or a nice, fat purchase order.

Originally Posted by StellarKnight

Demand elasticity for products will also play a pretty big role in whether or not a tax will be transferred to the consumers.

Originally Posted by drgonzo

Indeed, which is where the fact that PPACA is expected to increase demand for medical care and, thus, demand for medical devices, comes in.

But some consumers like Medicare and Medicaid pay for devices based on scheduled amounts. Were the schedules for Medicare and Medicaid adjusted to reflect this new tax?

custar

[barrel roll]

Probably not, knowing government.