If find it pretty much unacceptable, but completely normal, for 18 Democrats to “all of a sudden” realize there is a medical device excise tax of “only” 2.3 percent in the Affordable Health Care Act. Of course, they found out about this “hidden” tax in December, after the election was over.
The first reference Radio Vice Online made to the medical device tax was in Sept. 2009, when the Sound Off Sister wrote an article pointing us to a Wall Street Journal piece. This was not the final language included in Obamacare, but Congress and the president liked the idea of taxing an industry that was doing well … they had to pay their fair share.
An annual “fee” of $4 billion is imposed on manufacturers and importers of medical devices (page 218) as pointed out by the Wall Street Journal,
While there are some exemptions, such as tongue depressors and eyeglasses, most of the devices tax will fall on hundreds of thousands of products that are basic components of modern medicine. Some are routine—surgical equipment, diabetes testing supplies—while others are cutting-edge technologies, like replacement joints, pacemakers, stents, and MRI and CT scanners.
Then House Speaker Nancy Pelisi (D-Calif.) told us Americans would have to wait to see what was in the legislation until after it was passed and implemented, and now – days before the implementation of the tax hikes and only after the election – 18 Democrat Senators realize this part of the legislation is no good?
Last month, 18 Democratic senators and senators-elect (including New York’s own Sens. Charles Schumer and Kirsten Gillibrand) wrote Majority Leader Harry Reid, asking him to delay implementation of this 2.3 percent excise tax on the sales of everything from pacemakers to tongue depressors. The House already voted to repeal the tax, which is projected to extract as much as $29 billion from medical-device firms.
This is your Senate. These are the people we’ve elected to represent the states.
There’s a reason that lawmakers from both parties are looking to scrap the tax: It will cost many Americans their jobs, stifle innovation and lower job-creation in the sector.
I thought ensuring big business and the rich people paying their fair share was the right thing to do? If a “small” 2.3 percent tax on a successful industry is bad juju, why is it absolutely necessary the successful individuals who make more than $200,000 to $250,000 or more to pay a higher income tax? Many of those individuals are business owners themselves, who hire people, create new products and services that are innovative, and expand their business to hire more individuals in the future.
Nope, they are still targets. I’m so damn confused…
The tax will also put a damper on medical innovation. Most new medical devices are invented by small, venture-backed companies that invest heavily in research and development — and so run losses for years before getting their device approved by federal regulators and ultimately turning a profit.
If they come up with a promising prototype, their financial futures are still not secure. Bringing a new, low-risk medical device from concept to market can cost around $31 million — $24 million for activities related to gaining regulatory approval.
Yet the tax applies to gross sales of applicable devices, regardless of a company’s profitability or ability to pay. So companies with weak balance sheets (innovative small firms among them) may face bankruptcy.
So the entire argument these 18 Democrat senators have put forward is directly out of Chapter 1 of the conservative/capitalist playbook. That’s priceless.