published Thursday, February 16th, 2012

BlueCross, PACs and Washington's tax-and-regulation threat

There is broad public agreement that big money has large, often negative effects on the American political system. It's absurd to think that large campaign donations and other major political spending have no influence on whether certain candidates are or are not elected and on which bills may get more favorable consideration. If political spending had no impact, it would dry up.

But the influence game is complicated.

In some cases, individuals, unions or corporations engage in political spending in the hopes of securing special treatment. They want an unjust benefit, in other words. But in other cases, the goal may primarily be to head off mistreatment by lawmakers, whose actions affect us all.

When Democrats passed ObamaCare in 2010, they included, among other burdens, a 2.3 percent excise tax on medical devices -- everything from pacemakers to artificial hips. The goal of the tax, which kicks in next year, is to generate $20 billion over 10 years to help fund ObamaCare.

But medical device makers are already cutting jobs in anticipation of the harm the tax will cause them. Michigan-based manufacturer Stryker Corp. announced in November that it would lay off 5 percent of its workforce in preparation for dealing with the economic fallout.

"There is no doubt that we're already starting to think about actions that offset that additional tax," CEO Stephen MacMillan said, noting that the tax would add an estimated $150 million cost for the company.

Other medical device makers have the same concerns.

"This bill is a jobs killer," Ernie Whiton, chief financial officer for Zoll Medical Corp., which makes heart defibrillators, said in The Boston Herald. "We could be forced to [move] manufacturing overseas if we can't pass along these costs to our customers."

In an atmosphere where politicians have dire effects on businesses large and small, are we surprised that companies pour money into the political process -- out of a sense of self-preservation, if nothing else?

You may have read that Chattanooga-based BlueCross BlueShield of Tennessee, which already has a state political action committee, has now formed a PAC to lobby the federal government, too.

"As you are well aware, with the passage of the Affordable Care Act [ObamaCare], we are in a new political environment of opportunities and challenges for our company and industry," read a letter from CEO Vicky Gregg to thousands of the company's employees statewide.

"Your support of our PAC is important in giving us an opportunity to help determine who will govern us and who will set the business climate in which we operate."

That points to the root of the problem: Instead of letting companies' success or failure be based on the voluntary, free-market choices of the American people, Washington is picking winners and losers in the market. Washington shouldn't "set the business climate" at all. It should protect private-property rights, prevent fraud and then mostly get out of the way of the market.

Considering the threats that federal lawmakers pose to companies in the form of higher taxes and heavier regulation, it's hardly a shock that BlueCross is seeking a greater voice in Washington.

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conservative said...

"In an atmosphere where politicians have dire effects on businesses large and small, are we surprised that companies pour money into the political process -- out of a sense of self-preservation, if nothing else?"

That's exactly right! Socialist regulations and taxes destroy JOBS and business. That's why many move overseas or to states with less regulations and taxes on business- Tennessee for one. Lieberals are either to stupid or to wedded to Socialism to care.

Great Article! Many truthful points to ponder.

February 16, 2012 at 8:59 a.m.
charivara said...

Ignorant comment! Many false points to ponder. We are currently in one of the lowest tax environments since World War II. Yet we are also in one of the worst economic situations since then with unemployment at almost 9% while many corporations are making record profits. Compare the taxes paid by corporations and wealthy individuals in the 1950s with those of today. Compare the economic condition of Americans of that era with those of today. It’s unlikely that high taxes are the cause of our current woes.

Terms like “conservatism” and “job killer” are used by the wealthy and powerful to mask the socialism which benefits only them them and to fool the stupid into supporting them. It’s been conservative policies of the last 30 years-fewer regulations, lower taxes on the wealthy and corporations, (not to mention unfunded, unnecessary wars)-which have gotten us to where we are today. That’s the poison fruit of today's conservatism: socialize corporate loss and privatize corporate gain. How willfully obtuse does one who is not a multibillionaire have to be to support this ideology? When has this conservatism ever accomplished anything positive for either the working, female, minority or unfortunate American?

If conservatives were really so concerned about the influence of PAC money in elections they would support taxpayer-only financed elections. That would eliminate the clout that corporations now have to influence legislation that benefits only them. As the lapdogs of the wealthy and powerful, don’t expect conservatives to support democracy. That’s what they call socialism.

February 16, 2012 at 10:46 a.m.
conservative said...

Did you ever notice that Lieberals and Socialists ( yes, I know they are the same ) always call for more taxes and regulations. That is more taxes on OTHERS, and not themselves. It is always their defined "rich" and corporations who should pay more and be regulated more.

They are clueless in economic matters and are more than willing to display their ignorance. Why let us just place more taxes and regulations on corporations, totally oblivious to the fact that in order to stay in business that corporation will just pass the cost on to him. He then will blame the corporation will he not?

No nation has ever taxed and spent themselves into prosperity. Our national debt just like personal debt is caused by SPENDING.

February 16, 2012 at 11:20 a.m.

They don't realize that the corporations don't actually pay the taxes. They are too blind to see that the companies just pass the cost on to them in the form of higher prices. That is what public education run by socialists and bottom of the barrel minds gets you. I'm not saying all teachers are "socialist" or from the bottom of the cognitive barrel, just the majority.

Freedom lies here:

February 16, 2012 at 1:15 p.m.
tipper said...

Please. Jobs go overseas because corporations lobbied sympathetic congressmen and women to allow them to do so with tremendous tax breaks and avoidance of environmental and safety regulations. If you lowered the corporate income tax rate to 12%, corporations would find another country that charges 11%. When you can call in thousands of Chinese workers to assemble a product by hand at a pittance of what American workers get-union or not-and do so at risk to their own health and future, it's hard to feel any sympathy. Some of these corporations have little regard for American or its workers as long as we buy their products at a huge markup. "Self-preservation"...get real.

February 16, 2012 at 2:01 p.m.
conservative said...


Your incredible! You agree that corporations go overseas to avoid higher taxes and regulations but you are outraged by it. They are in business to make a profit. Those who provide the best deal over their competitors are rewarded with record profits! It has always been that way. IF you work do you work for nothing or do you PROFIT from your labor? Surely IF you have held a job, there were years you made more money than other years. You had RECORD PROFITS.

Lieberals must have the erroneous belief that corporations exist to provide jobs not profit.

February 16, 2012 at 5:36 p.m.
tipper said...

I love to read your fantasies about what's real and what's not. Now try this. Check out all the tax money this country loses in Ireland in coordination with the Dutch, and how much tax money that never sees the light of day in P.O. boxes in Bermuda. Yes profit. Profit without reason. If you think corporations are always correct in their practices and need not be concerned about America and its workers, you're not only "conservative," you're delusional. As to corporations always being that way, you must be very young or choose to ignore history. I remember when corporations cared about the people and appreciated what employees did to make profits. They even shared them with their workers. Today management and execs make ridiculous and dangerous decisions, but when they need to save their collective butts, they immediately axe labor. They never look in the mirror. I understand why you think I am incredible. I actually believe one can make fair profits and still create good jobs, but what corporations with support of big-money conservatives and their in-the-pocket legislators now practice is a sham. Republicans and their supporters keep screaming we're "killing jobs" and hindering the "job creators," yet they provide no plan except "no regulations." Since Reagan came into office, business and industry of all types have gotten carte blanche. We're choking to death on deregulation. How much more do workers and consumers need? 2008 is a prime example of what total deregulation can do. But hey, I don't expect you to get any of this or agree, so disregard my whole post. I know you will. Maybe some of the other posters will be more open-minded.

February 16, 2012 at 9:01 p.m.
conservative said...

Your scenario of corporations swapping countries for a 1% reduction in taxes is just silly.There are tremendous costs in transporting manufacturing equipment and materials, working within the rules and regulations of a new country, labor costs, the language barrier etc. You sound like you have been exploited by Demoncrat and labor union propaganda.

February 16, 2012 at 9:11 p.m.
conservative said...

"we buy their products at a huge markup"

We still have choice and competition in this country although Lieberals seek to undermine these. I don't buy products with a "huge markup" ; you should try it you can save a lot of money.

February 16, 2012 at 9:21 p.m.
tipper said...

Apparently, you don't understand instructions. What a surprise!

February 16, 2012 at 9:25 p.m.
conservative said...

It's obvious that you are confused.

February 16, 2012 at 9:30 p.m.
tipper said...

I'm not confused at all. I know exactly what you are; and so does everyone else.

February 16, 2012 at 10:06 p.m.
tnmalt said...

Wow conservative. I'm impressed by your lack of knowledge. You do realize that the US was doing quite well in the '50s and '60s when the tax rates were much higher than the '80s.

February 16, 2012 at 11:44 p.m.
JustOneWoman said...

Con knows nothing. He spouts verbal abuse and hate. He has no power here. He has no knowledge here.

February 17, 2012 at 11:27 a.m.
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