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Tom Hutchinson: Obamacare, High US Taxes Force Healthcare Consolidation

By    |   Wednesday, 25 November 2015 12:41 PM

Obamacare and high American taxes are forcing consolidation in the healthcare industry, Tom Hutchinson, senior editor of the Newsmax newsletter "The High Income Factor," told Newsmax TV.

"The reason you're seeing so much consolidation in the healthcare industry is that these companies just have to do something to remain profitable with the Obamacare law," he told “Newsmax Now.”

"They find that they have to be bigger, have a lot more scope and scale in order to be able to deal with the massive compliance costs," he said.

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However, he explains that this week's blockbuster Pfizer deal is a little different.

"That kind of deals with a different problem, which is that the American corporate tax rate is too high. It's the highest in the world at 35 percent, but beyond that what the American government does is it taxes companies on both their overseas revenues and the U.S. revenues," he said.

"So what you see these companies do is this so-called inversion where a big American corporation buy a smaller company overseas and domiciles itself overseas and in that way avoids the double taxation," he said.

So how will all this hurt Americans?
"The problem is that not enough young people are signing up on these exchanges because there's sort of a loophole in the law where you can just sort of pay the fine which is cheaper than the healthcare for not having it and then when you get sick you sign up," Hutchinson said.

"So a lot of people are opting to do that. The law really isn't sustaining itself and it requires government subsidies in order to be profitable. These government subsidies are temporary because when they were designed, they figured well it's just temporary until the law is off and running and then it won't be necessary, but it is necessary," he said.

"If this law is to survive anywhere near the current form, it's going to have to arrange for a more permanent and higher subsidies from the federal government and the taxpayer."

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Tom Hutchinson, senior financial editor at "The High Income Factor" Newsletter, discusses Pfizer buying Allergan for $160 billion and the cost of Obamacare.
Obamacare, Taxes, Healthcare, Economy
Wednesday, 25 November 2015 12:41 PM
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