Think Tank Rips Medical Device Tax
The Tax Foundation, a Washington, D.C.-based think tank, called for the repeal of the 2.3 percent medical device tax introduced under the Affordable Care Act, finding that it would heavily impact the medical device industry.
Congress passed a moratorium in 2016 to suspend the tax, which was extended last year to expire on Dec. 31, 2019. The tax is scheduled to take effect on Jan. 1, 2020 if the moratorium is not extended.
The policy group said the tax is not sound policy “due to its complexity and adverse economic effects.” It claims that the tax would result in a decline of about 21,000 full-time jobs and a $1.7 billion reduction in gross domestic product.
It also argued that the tax narrowly targets profit margins of the medical device industry, which would ultimately stifle innovation.
The Tax Foundation also flagged that the tax lacks transparency and neutrality, noting that smaller device companies, particularly startups, would face a greater burden than larger companies.
The foundation also argued that the tax would result in higher costs to consumers, and limit access to the newest medical technology because of the increased costs on both patients and the industry.