Happy New Year’s Tax
The medical device tax apparently has more comebacks than Mariah Carey. In the first minutes of 2018, while the pop star was redeeming herself on ABC for her widely panned New Year’s Eve performance the year before, the 2.3% excise tax had its own comeback after Congress had suspended implementation for two years.
The tax was originally imposed in 2013 to fund Obama Care. But it proved unpopular, and not only among Republicans. Democrats from states with medical device companies squawked too. Even Al Franken, the unlamented former Senator from Minnesota, had vowed to fight this “unfair burden on the medical device industry.”
The tax on everything from catheters, ultrasounds and X-ray equipment to pacemakers and heart stents is a drag on one of America’s most innovative industries. In a Dec. 20 letter to President Trump, Scott Whitaker, president and CEO of the Advanced Medical Technology Association, cited a study of Commerce Department data that “showed that the medical technology sector saw a loss of 29,000 jobs” the last time the device tax went into effect. Because the tax applies to sales, companies pay it even if they don’t make money.
In President Obama’s last budget, Republicans managed to suspend the tax for 2016 and 2017. The assumption was that the tax that nobody could defend was on its way to full abolition. Well, it’s 2018 and the tax has returned though the argument for it hasn’t improved. Republicans made a last-ditch effort to get rid of it in 2017, but when the Senate failed to pass the “skinny repeal” of ObamaCare, the tax was fated to rise again.
Republicans and President Trump can still put Democrats who criticized this tax to the test by forcing a vote to kill this unhealthy levy on jobs and innovation.
Appeared in the January 4, 2018, print edition.