Cramer: House Repeals Medical Devise Tax

Press Release

Today, Congressman Kevin Cramer joined a majority of the members of the U.S. House of Representatives to pass H.R. 160. The bill repeals the 2.3 percent excise tax on the sale of medical devices imposed by the Patient Protection and Affordable Care Act, better known as Obamacare.

"The medical device tax already cost thousands of Americans their jobs and continues to force companies out of business or drive them overseas in order to compete. America has long lead the world in the creation of new medical technologies, but the imposition of this tax to pay for Obamacare discourages innovators and manufacturers from building their businesses here. We should reward innovations which propel medical advancements forward, not penalize them with taxes," said Cramer

The Patient Protection and Affordable Care Act (Obamacare) (Public Law 111-148) imposes a tax equal to 2.3 percent of the sale price on the sale of any taxable medical device by the manufacturer, producer, or importer of such device. According to a 2014 industry survey, the "tax resulted in employment reductions of 14,000 industry workers in 2013 and years prior to implementation of the tax, with approximately an additional 4,500 jobs lost in 2014. Furthermore, the industry will forgo hiring of nearly 20,500 employees over the next five years. Considering both jobs lost and jobs not created, the tax will result in 39,000 fewer industry jobs." The survey further found that "applying this ratio to jobs lost or forgone suggests that the impact of the tax on indirect employment could be as much as 156,000 jobs, for a total job loss due to the tax of 195,000 jobs." Three-quarters of survey respondents also indicated that that had taken one or more of the following actions in response to the tax: deferred or cancelled capital investments; deferred or cancelled plans to open new facilities; reduced investment in start-up companies; found it more difficult to raise capital (among start-up companies); reduced or deferred increases in employee compensation.

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