Some Dems Say Medical Device Tax Repeal Is A 'Moronic' Idea

[joshcryer]

9. CBPP on the medical device tax:

House Republicans have reportedly decided to attach to the Senate-passed funding bill for fiscal year 2014 a provision to repeal the 2.3-percent excise tax on medical devices that policymakers enacted in 2010 to help pay for health reform. The excise tax is sound, however, and the arguments against the tax don’t withstand scrutiny.

The tax does not single out the medical device industry for unfair treatment. The excise tax is one of several new levies on sectors that will gain business due to health reform. The expansion of health coverage will increase the demand for medical devices and could offset the effect of the tax.

The tax will not cause manufacturers to shift production overseas. The tax applies equally to imported and domestically produced devices, and devices produced in the United States for export are tax-exempt.

The tax will have little effect on innovation in the medical device industry. To the contrary, health reform may well spur medical device innovation by promoting more cost-effective ways of delivering care.

http://www.cbpp.org/cms/?fa=view&id=3684