Bills Introduced to Repeal Medical Device Tax
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It’s a bipartisan mission in Congress to repeal the 2.3% medical device tax.
The Hill covers the House bill co-sponsored by 180 members:
That tax took effect at the start of 2013, and is expected to raise a few billion dollars a year in tax receipts for the government, and $30 billion over 10 years. But opponents of the tax say it will hinder innovation and job creation in the medical device industry.
"Placing a new tax on the backs of U.S. medical innovators and entrepreneurs who employ more than 400,000 Americans is not a prescription for economic growth or job creation," said Rep. Erik Paulsen (R-Minn.), who sponsored the bill. "In fact, companies have already laid off thousands of employees as a result of this onerous new tax, and more jobs will be lost now that this tax is in effect.
"Repealing the medical device tax eliminates barriers to medical innovation, ensuring patients have access to life saving technologies and reduces the burden on tight R&D budgets, spurring job growth in the industry," said Rep. Ron Kind (Wis.), the leading Democrat on the House bill.
Reuters reports on the Senate bill:
Senators from Minnesota, Indiana and Pennsylvania, where many big medical technology companies are based, are among those who have been pushing for a repeal.
"In order to compete in the global economy our medical device businesses need a level playing field," said Democratic Senator Amy Klobuchar of Minnesota, home to Medtronic Inc, one of the biggest medical device makers.
Since the tax applies to device sales and not profits, small businesses in the medical device industry will be especially affected. Also, when you add this tax to the high U.S. corporate tax rate, American medical device manufacturers become less globally competitive.
Since the tax covers devices that are used on animals, vet costs will also rise.
Last year, a repeal bill passed the House but stalled in the Senate. Let’s hope there’s a better result with these bills.
[H/T United Liberty]