Medtronic, Intuitive Surgical, and The Shocking Truth About This Hated Obamacare Tax

How the industry is responding
Even before the tax took effect, companies took steps to reduce its potential impact. Stryker Corporation (NYSE:SYK) said last November that it would lay off 5% of its workforce in order to save $100 million in costs. Medtronic, Inc. (NYSE:MDT) shifted most of its hiring toward overseas operations, while Boston Scientific Corporation (NYSE:BSX) announced layoffs last July only to announce immediately thereafter its plans to invest $150 million in China.

Yet now that the tax is here, the fear is how much larger the impact could become. What’s best known is the cost to existing major players in the medical-device space, but the collateral impact on small companies that are just getting started in the field could devastate the future of the industry. For many small companies, the prospect of having to deal with a substantial tax during their critical development phase will prove to be an insurmountable impediment — or may simply lead entrepreneurs not to try in the first place.

Will the majority win?
What’s clear from the Senate vote is that lawmakers on both sides of the aisle are unhappy with the medical-device tax. Yet despite their lack of support, without further action, the tax will continue and could do irreparable harm to a key industry for the nation’s overall economic growth prospects.

The article The Shocking Truth About This Hated Obamacare Tax originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Intuitive Surgical and MAKO Surgical . The Motley Fool owns shares of Intuitive Surgical and Medtronic.

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