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It should surprise no one that Obamacare contains numerous time bombs of illogical and destructive policy. One such policy, which has recently gained national attention, is the implementation of a 2.3% medical device tax. This tax applies to any and all medical devices, from crutches to high tech surgical equipment. Both Republicans and Democrats have called for a delay, or repeal of the tax, to no avail. Despite the bipartisan push, most recently by Congressman Erik Paulsen, the administration has failed to act, and now it may be too late; the first medical device tax deposits are due to the IRS in less than two weeks.
The tax, which is expected to raise $30 billion in new revenue, was forced through by the Obama administration, without debate or pause to examine the potential consequences. Industry experts estimate the tax has already cost 6,000 jobs and could potentially cost upwards of 40,000 in the future, due to the unprecedented increase in manufacturing cost. Furthermore, the implementation of an arbitrary tax on the medical industry will hurt innovation. Manufactures will undoubtedly be less inclined to invest resources toward research and take risks on prototypes when their profit margins are being slashed. Lower margins equate to less disposable income for product development, putting American corporations at a disadvantage globally.
Additionally, the medical device excise tax has the potential to hurt veterans and taxpayers alike. Wounded and retired veterans make up a large percentage of medical device users; the cost of these devices is often shared between the VA and the individual. Adding an additional 2.3 percent to the cost of medical equipment has the potential to disproportionally impact disabled veterans, many of whom live on fixed retirement or disability income. Risking veterans’ financial security while wasteful government programs hemorrhage resources is immoral and entirely irresponsible.
While it is probably too late to stall the implementation of the tax, there is a reasonable chance that legislation repealing the tax could pass. I spoke with Congressman Erik Paulsen’s staff, who indicated that the Congressman would be authoring a bill to do just that in the near future. While the medical device tax is a monotonous issue, certainly less exciting than the Presidents gun grab, it is important for us to remain vigilant. Federal regulations and tax policies such as this appear insignificant when taken alone, however we must remember the US Tax Code didn’t amass to 73,608 pages overnight, it is full of mindless taxes such at this. Encourage your legislators to support Congressman Paulsen's efforts at repeal, with enough targeted support we can save thousands of jobs and protect our status as a global leader in healthcare innovation.