Jul 08 2015
Chairman Dan Coats (R-Ind.) today released a Joint Economic Committee majority report detailing the flaws of the medical device tax. The tax was included in the Affordable Care Act and went into effect on January 1, 2013.
Key points in the report include:
- Opposition to the medical device tax is bicameral and bipartisan. Roughly a quarter of the House Democratic Caucus joined House Republicans to pass the Protect Medical Innovation Act of 2015, a bill that repeals the medical device tax, and 79 senators, including 33 Democrats, supported an amendment calling for repeal of the tax in the 2013 budget resolution.
- This tax violates commonly accepted principles of sound tax policy in that it targets a specific industry, lacks transparency and is rife with complexity.
- The medical device tax is bad for entrepreneurs and startups because it is assessed on the amount of revenue collected from the sale of a manufactured device, rather than profit generated. Due to this structure, even unprofitable small businesses must pay the tax.
The full report is available below.
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