U.S. House Panel Approves Repeal of Medical Device Tax
The House Ways and Means Committee approved legislation Thursday that would repeal a medical-device tax that analysts estimate could cost 2,600 jobs in Massachusetts.
The party-line committee vote advanced a measure to repeal the federal health care reform law’s 2.3 percent excise tax on the gross sales of medical devices. H.R. 436, the Protect Medical Innovation Act of 2011, is expected to be taken up by the House as early as next week.
AIM and other business groups opposed the excise tax during consideration of the heath-care bill in 2010 and have supported ongoing efforts to roll back the tax before it takes effect in 2013.
All 11 Democrats on the committee, including U.S. Rep. Richard E. Neal of Springfield, opposed the repeal.
The 2.3 percent levy would apply to the sale of everything from cardiac defibrillators to artificial joints to MRI scanners. The device tax is supposed to raise $28.5 billion from 2013 to 2022, and is especially harmful because it applies to gross sales, not profits. As a result, companies at make-or-break margins could be taxed out of existence, especially in an intensely competitive industry where four of five businesses are start-ups or mid size.
Meanwhile, Europe, Israel and Asia are working aggressively to overtake the America lead in life sciences, in such area as tissue engineering, nanotechnology, and gene –based diagnostics. The medical device industry employs approximately 26,000 people in Massachusetts.