Avoiding a Tax Increase That’s Bad for Your Health

By May 29, 2012Taxation

 We’re pleased to hear that early next month members of the House of Representatives will have the opportunity to vote to “excise” from the Internal Revenue Code, a new tax on medical devices set to begin in 2013. This ill-conceived 2.3 percent tax on gross sales of medical devices manufacturers was part of the health care reform law.

By increasing the costs of medical devices, the excise tax will hurt the companies and their workers and also stifle the research and innovation that leads to the development of medical products that contribute to the health and well-being of all Americans.

Moreover, as today’s Wall Street Journal points out, perhaps the most damaging impact of the excise tax is on U.S. competitiveness. With Europe, Israel and Asia working hard to take over the United States’ lead in the life sciences, a tax like this will only make their job easier. Let’s hope the House gets the ball rolling and Congress sends a bill to the White House as soon as possible that would stop this job-killing tax before it even starts.

Dorothy Coleman

Dorothy Coleman

Dorothy Coleman is vice president of tax and domestic economic policy at the National Association of Manufacturers (NAM). Ms. Coleman is responsible for providing NAM members with important information related to tax issues and representing the NAM’s position to Congress, the Administration and the media. An NAM spokesperson for tax policy issues, she coordinates membership coalitions; prepares testimony, reports and analyses; and responds to media inquiries. Before taking over as vice president of the tax policy department, she served as director of tax policy from April 1998 to April 2000.
Dorothy Coleman

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  • What is even more interesting is that hospital groups are trying to force device manufacturers to certify that they are not passing along the cost of this tax. How would that be determined by even the most expert of forensic accountants? How would that contract be enforced and the provisions proven? This law is not only bad policy, but the unintended consequences create many unenforceable provisions within contract law.

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