🔥 Find me at MedicalDevicesGroup.net 🔥
6 min reading time
No, not the Seahawks versus the Patriots.
At http://medgroup.biz/repeal-can-happen, you can help get the medical device tax repealed.
We’ve never been closer. Sen. Orrin Hatch (R-Utah) and 10 U.S. Senators (on both sides of the aisle) filed another bill to repeal the 2.3% medical device excise tax.
Emails and calls to your senator DO make a difference, a Congressional staffer told me. “Senators say, “If no one in my constituency is talking about it, it’s hard to make it a top priority.'”
So give your Senator real-life examples how you’ve been affected at http://medgroup.biz/repeal-can-happen.
There are three ways you can take action.
ONE: Write your Senator. There are links to all 100 Senators. Click on your Senators’ links to go to their Contact page to send them a message.
TWO: Go on Record. There’s a place to send your story to me if you’re willing to go “on record.” In fact, I was called just yesterday for a quote on a radio program. The topic is hot again – let’s get your story out there.
THREE: Watch and Share. Senator Klobuchar and Rep. Erik Paulsen shot a video message for the Medical Devices Group. Give it a listen and share it on social media.
Ideas for your contributions:
• Ask your Senator to include tax repeal in all forthcoming tax reform initiatives.
• Have you laid anyone off? Held off on hiring? Lost your job?
• Have you cut back on research and development? Delayed a new product introduction?
• Are you aware of a new facility that didn’t happen or production that was moved outside the United States?
It’s time to MAKE SOME NOISE!
I was fully and publicly gutted when I first discussed this issue in April 2012.
See http://medgroup.biz/public-evisceration if you like pain.
As before, some will say, “This isn’t a political forum!” and leave the group.
Others will say, “You can’t blame job losses on this tax,” or “Here’s a link that says the tax is good.”
And others (mostly those outside the United States) will say the tax is good for their business.
In anticipation of these comments, to explain why I’m writing about the tax again, I’ll use group member Lev Melinyshyn’s (http://medgroup.biz/lev) words from his 2013 letter to the Chicago Tribune,
“This tax on gross sales, whether a company is profitable or not, takes the cumulative tax rate for our 50-person medical device company to nearly 70% of every dollar earned.
We are now paying this tax every two weeks. It’s like having 7 more employees on the payroll – employees who do nothing and do not contribute to production, sales, or marketing.”
In sum, I can *at least understand* a tax on profits. But an excise tax on SALES? That hurts innovation and strikes me as wrong.
If you agree, visit http://medgroup.biz/repeal-can-happen and take action.
If not, stick with us. We will return to our normal, apolitical commentary next Tuesday.
Make it a great week.
P.S. The free webinar, “12 Steps for UDI Submissions to the FDA GUDID,” will be held tomorrow, Jan 21 at 12 pm EST.
See http://medgroup.biz/UDI-in-2015 to register.
If this tax had been left on the books of US companies, chances are 1/3 to 1/2 to maybe most of it would have gone toward job creation or R&D. So, that means $1.8 billion is actually $900 million since half the tax comes from companies based in the U.S. So instead of a tax, this cash could have been 15,000 new jobs that might have paid $60,000 each – annually. Factor in the industry multiplier because these would have been value-added jobs that create – conservative estimate here – 2 others jobs in local economies. Grand total job loss/impact? Potentially 90,000 jobs during the two years this tax has been in place.
Who knows how many cures might have been developed or new treatments discovered – countless, no doubt.
Paul offers a good point: what’s the pay-for? The easiest and most justifiable tax is on fast food (clogs arteries leading to morbidities) or tobacco (cancer/costly end life treatments) or vehicles because wrecks lead to much unnecessary trauma/treatment or alcohol for the same reasons tobacco is already taxed, death/social costs. I think a 15 percent increase in local and federal tobacco taxes would have raised the same amount of jack as this tax.
This isn’t a political issue, either. It’s a policy/funding issue and once again we can all be thankful that Joe has the backbone to toss this out there for debate.
Paul M. Stein
Frankly, I wish there was another way to fund ACA like Fred suggested, but I don’t see our Congress being at that point yet. I am by no means pro-tax for industry, but looking to where we are as a country, If the US House, Senate and President want to be realistic about a funding mechanism for ACA, they should discuss spreading this tax across the ENTIRE health care deployment infrastructure (pharma, health insurance, medical device, hospitals/clinics, possibly providers but that would depend), as the argument that medical device should shoulder this burden was unrealistic to begin with, and now that its real effects are known, are terribly real now. If this excise was leveled across the entire ecosystem, it would probably level a tax below 1%, maybe closer to 0.75% or lower, which would easier for all involved participants to stomach.
While this would be a longer proposition trying to involve the entire medical ecosystem for an excise tax, I think the appropriate thing to do now is to push for the medical device excise tax repeal. This forces the conversation on how we can fund ACA realistically and sustainably, without targeting a single industry which is frankly bringing in much less gross revenue and is much less profitable that some of its brethern in pharma and health insurance companies. This may though get us to a different vehicle of funding altogether by taxing gross revenues on individuals.
Matthew J. Doyle, P.E.
It’s hard not to have any sentence with Orrin Hatch and both sides of the aisle be construed as anything other than an attempt at being jocular.
That’s like calling Tom Coburn a real cost-cutter when it comes to his obstruction of the Clay Hunt bill – a joke at best, a somber rouse at worst.
Martin (Marty) Wynkoop
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