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The only reason why you want to "examine" these taxes is to try and find some other way to spin it.
All taxes are based on the concept of charging people to provide a service. This is a service that they are saying they are going to have to charge for. Thats a tax. End of story.
Don't start going down the "slam Glenn Beck and republican route" simply because a simple campaign promise is blatently broken here.
Thats on the Presidents hands, not ours, no matter who you try to justify, excuse, or spin it.
Believe what you want, I dont care. Glenn Beck - I was talking about (and to) Roy, and Roy *is* going to go with what Glenn has to say. I was also talking to Roy about "examining" the taxes, and I explained why I think it's better to look at them calmly rather than to just sit on the side and winge and moan.
I dont think in this entire thread I used any word besides 'tax."
Show me what Im "spinning". Im just trying to understand the damn thing, unlike any of you.
The simple application of basic math tells you that when some have no dollars and some have some dollars, the result of equalization is that everyone ends up with some dollars but someone ends up with less. This lesson is taken from NAFTA.
OK - I went to the actual bill, and pulled out the section dealing with medical parts. Here it is:
SEC. 4061. MEDICAL DEVICES.
(a) IN GENERAL.—There is hereby imposed on the first taxable sale of any medical device a tax equal to 2.5 percent of the price for which so sold.
(b) FIRST TAXABLE SALE.—For purposes of this section—
(1) IN GENERAL.—The term ‘first taxable sale’ means the first sale, for a purpose other than for resale, after production, manufacture, or importation.
(2) EXCEPTION FOR SALES AT RETAIL ESTABLISHMENTS.—Such term shall not include the sale of any medical device if—
(A) such sale is made at a retail establishment on terms which are available to the general public, and
(B) such medical device is of a type (and purchased in a quantity) which is purchased by the general public.
(3) EXCEPTION FOR EXPORTS, ETC.—Rules similar to the rules of sections 4221 (other than paragraphs (3), (4), (5), and (6) of subsection (a) thereof) and 4222 shall apply for purposes of this section. To the extent provided by the Secretary, section 4222 may be extended to, and made applicable with respect to, the exemption provided by paragraph (2).
(4) SALES TO PATIENTS NOT TREATED AS RESALES. —If a medical device is sold for use in connection with providing any health care service to an individual, such sale shall not be treated as being for the purpose of resale (even if such device is sold to such individual).
Now, what I THINK this says, and I'm neither a doctor nor a lawyer, so this is just what I THINK....
Example 1. A hospital buys a pacemaker - that's the first taxable sale of that medical part, and the hospital pays a 2.5% tax on the sale (an increase they will be quick to pass along to the patient and/or health insurance company). See 4061 (a) and (b)(1)
Example 2. A person buys a wheelchair at a retail establishment - no 2.5% tax on the sale, since it is a retail sale. See 4061 (b)(2)(A and B) However, the price of the wheelchair may include an additional amount equal to the 2.5% tax.
Example 3. A person is diagnosed with sleep apnea, and his doctor just happens to have a fine selection of CPAP machines, and the patient buys one. Who pays the tax?
If the doctor bought the CPAP intending to sell it to a patient (i.e., a resale), does he pay the tax? 4061 (b)(1) states: "The term ‘first taxable sale’ means the first sale, for a purpose other than for resale, after production, manufacture, or importation." So, I don't think he pays the tax, since his original purchase was for the purpose of resale.
But then we have 4061 (b)(4) that says: "SALES TO PATIENTS NOT TREATED AS RESALES". Now, that leaves two possibilities. Either the patient pays the tax -- if the sale of the CPAP to the patient isn't considered a resale, it must be considered the first taxable sale, right? Or, the doctor pays the tax, since even though he bought the CPAP with the intention of selling it to a patient, sales to patients aren't resales, and so the phrase "for a purpose other than for resale" in 4061 (b)(1) doesn't apply.
Or, do they both pay the tax? Do neither pay the tax?
Believe what you want, I dont care. Glenn Beck - I was talking about (and to) Roy, and Roy *is* going to go with what Glenn has to say. I was also talking to Roy about "examining" the taxes, and I explained why I think it's better to look at them calmly rather than to just sit on the side and winge and moan.
I dont think in this entire thread I used any word besides 'tax."
Show me what Im "spinning". Im just trying to understand the damn thing, unlike any of you.
Do you really believe that most of our leadership understands everything stuffed in this bill? How on earth do we understand the full inpact of now 1,900 pages of pork? I do know this, if this adds considerable cost to the average American's shrinking income, this will be a one term administration.
Example 3. A person is diagnosed with sleep apnea, and his doctor just happens to have a fine selection of CPAP machines, and the patient buys one. Who pays the tax?
If the doctor bought the CPAP intending to sell it to a patient (i.e., a resale), does he pay the tax? 4061 (b)(1) states: "The term ‘first taxable sale’ means the first sale, for a purpose other than for resale, after production, manufacture, or importation." So, I don't think he pays the tax, since his original purchase was for the purpose of resale.
But then we have 4061 (b)(4) that says: "SALES TO PATIENTS NOT TREATED AS RESALES". Now, that leaves two possibilities. Either the patient pays the tax -- if the sale of the CPAP to the patient isn't considered a resale, it must be considered the first taxable sale, right? Or, the doctor pays the tax, since even though he bought the CPAP with the intention of selling it to a patient, sales to patients aren't resales, and so the phrase "for a purpose other than for resale" in 4061 (b)(1) doesn't apply.
Or, do they both pay the tax? Do neither pay the tax?
Where's my aspirin?
Here ya go, son... ah that'll be $600, thanks.
Great post, kudos for having the brains to look the damn thing up and wrestle with it. Thanks also for giving a link to it.
I think the overall goal of all this language in MEDICAL DEVICES is to keep the tax off the patient. That doesnt mean the seller-to-the-patient wont mark up the price. Another reason I think so is that further down, at p. 342, there's a section (c)(5) that *might* mean that first purchaser (the doctor, hospital, retail seller, wholesaler maybe) can recover the tax amount from the manufacturer.
‘‘(5) RESALES PURSUANT TO CERTAIN CONTRACT ARRANGEMENTS.—
‘‘(A) IN GENERAL.—In the case of a specified contract sale of a medical device, the seller referred to in subparagraph (B)(i) shall be entitled to recover from the producer, manufacturer, or importer referred to in subparagraph
(B)(ii) the amount of the tax paid by such seller under this section with respect to such sale.
‘‘(B) SPECIFIED CONTRACT SALE.—For purposes of this paragraph, the term ‘specified contract sale’ means, with respect to any medical device, the first taxable sale of such device if—
‘‘(i) the seller is not the producer, manufacturer, or importer of such device,
‘‘(ii) the price at which such device is so sold is determined in accordance with a contract between the producer, manufacturer, or importer of such device and the person to whom such device is so sold.
But, I could be wrong!
CPAP sale - Ive been staring at the first taxable sale-resale-exception language that goes with Example 3. for 10 minutes and getting confuseder and confuseder. Time for dinner and Los Phils.
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