by
Brendon Nafziger, DOTmed News Associate Editor | September 08, 2011
Medical device manufacturing is one of the few U.S. manufacturing sectors to have emerged relatively unscathed from the past recession and to maintain a favorable balance of trade. It also offers decent-paying jobs, the study said.
Should the tax actually hurt employers, the hardest hit states would be medical manufacturing hubs like California, Indiana, Massachusetts, Colorado and Minnesota, the study said.
Politicians from those states have already launched aggressive efforts to repeal the bill, and several bills are circulating in the Capitol. Two of the main advocates of scuttling the tax include Rep. Erik Paulsen, a Republican from Minnesota, and Sen. Scott Brown, a Republican from Massachusetts.
Unease about jobs
AdvaMed's report comes just as President Obama unveiled a $300 billion program to create new jobs, and during a time of national unease about the jobs situation.
"We got the news from August that no jobs were created, and the unemployment rate remains above 9 percent. GDP growth is slowing, and some people think that we are already in another recession," Furchtgott-Roth said.
Still, the actual impact of the tax on companies is unknown.
Because the tax also applies to foreign companies selling products in the U.S., it's not clear why by itself it would encourage companies to move their manufacturing bases elsewhere, as it would not help them avoid the tax for U.S. sales. Also, it's possible the tax could be deductible. (The Internal Revenue Service did not respond by press time to DOTmed News' request for clarification.)
However, AdvaMed said the excise tax would just be an additional burden on U.S. companies, on top of America's higher corporate tax rate and stiffer barriers to getting devices approved by U.S. regulators.
"I would look at the device tax as the last straw on the camel's back," J.C. Scott, senior executive vice president of government affairs with AdvaMed, told reporters.
Furchtgott-Roth co-wrote the report with her husband, Harold Furchtgott-Roth, founder of Furchtgott-Roth Economic Enterprises and a former commissioner of the Federal Communications Commission.
In addition to being a Manhattan Institute fellow, Diana Furchtgott-Roth is the former chief economist with the Department of Labor, and has served as an economic and policy adviser under three presidents (the two Bushes, and Reagan).
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Galen Hiveley
medical device tax
September 08, 2011 11:08
Leave it to our government. They've screwed up the health care industry which is 1/6 of the nations GDP. They've thrown the country into a depression and are too dumb to realize it. We need to change Washington while there is still something left of the country. 2012 is the earliest we can do it. We just all have to hope there is something left of the country at that time and that it can still be salvaged.
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