Obamacare Medical Device Tax begins in 2013
Posted by FactReal on December 6, 2012
|LIBERAL POLICIES KILLING US SOFTLY
The IRS released yesterday the final rules for a new tax on medical devices to help foot the bill for Obamacare. Beginning in 2013, a 2.3% tax will be imposed on medical devices, such as thermometers, MRI machines, surgical sutures, knee replacement implants, pacemakers, tongue depressors, products sold for humanitarian reasons (i.e., experimental cancer treatment devices), etc., etc. This Obamacare tax will increase health care costs and will hit hospitals, doctors…and patients.
Bad news for Americans:
The tax, which begins in 2013, will not only hurt jobs but increase costs and stifle medical innovation. It affects companies that manufacture or import certain medical devices, which includes everything from surgical scalpels to MRI machines. The tax will make it more difficult for manufacturers to supply hospitals and caregivers with devices at an affordable price.
“All tax increases have negative economic effects because higher taxes take resources from the productive hands of the private sector and transfer them to the wasteful hands of politicians,” explains Curtis Dubay, a Senior Analyst in Tax Policy at The Heritage Foundation.
The 2.3 percent excise tax on many medical devices, which is part of the 2010 health care law, takes effect Jan. 1. On Wednesday, an Internal Revenue Service final rule detailed plans to levy the tax. [...]
The 58-page device rule lays out a tax structure for an industry that manufactures everything from thermometers to MRI machines. Notably, the law exempts basic consumer items — such as eyeglasses, contact lenses, hearing aids and anything “generally purchased by the general public at retail for individual use.” [...]
“This final rule does nothing to prevent the loss of jobs and innovation that has already occurred as a result of the medical device tax and will unfortunately continue if we do not repeal this bad policy,” Mark Leahey, president and CEO of the Medical Device Manufacturers Association… [...]
More than 800 companies and organizations recently signed on to a letter to Senate leadership calling for its repeal. The industry says tens of thousands of high-paying jobs are threatened…Stephen Ubl, president and CEO of the Advanced Medical Technology Association, said in a statement. “…While Washington talks about a fiscal cliff, this tax could push us off an innovation cliff, costing as many as 43,000 jobs and hurting the ability of medical technology companies to find tomorrow’s treatments and cures.”
In one potentially problematic aspect of the tax, companies selling dual-use products to medical and non-medical customers must pay the tax on those products, potentially putting them at a competitive disadvantage…
For example, it remains “an open question” when latex gloves come under the tax…
– ObamaCare Taxes to hit your Wallet in 2013