Advanced Medical Technology Association10.04.19
A recent report from the Tax Foundation shows an improving tax environment for U.S businesses and individuals, as the nation's "tax competitiveness" ranking rose to 21st place among developed countries in 2018 vs. 28th place in 2017.
That progress is threatened by the return in January of the 2.3 percent medical device excise tax, which risks the continued growth of one of America's most dynamic and globally competitive industries.
"We cannot allow this onerous tax to come back," said Scott Whitaker, president and CEO of the Advanced Medical Technology Association (AdvaMed). "We've said all along this is bad tax policy, bad health policy, and bad for patients and innovation. And a bipartisan majority in both the House and Senate agrees. We've got the votes to end this tax once and for all; we need Congress to act."
Although the device tax has been suspended since 2016, if Congress does not act by the end of the year it will be back in force and with it a $20 billion tax increase on the industry. While the tax was in effect from 2013-2015, the medtech industry shed nearly 29,000 U.S. jobs and had to cut back dramatically on R&D and other infrastructure spending.
The Tax Foundation credits the 2017 tax reform legislation with the improvement in the U.S. competitiveness ranking. However, any benefit from tax reform would be wiped out for the medical technology industry should the excise tax return. According to a study from E&Y, the industry is estimated to receive a $9.9 billion decrease in federal income tax liability over the 2018-27 period from tax reform. But this would be offset by the approximately $16.7 billion in additional tax liability for the same period if the tax came back.
That progress is threatened by the return in January of the 2.3 percent medical device excise tax, which risks the continued growth of one of America's most dynamic and globally competitive industries.
"We cannot allow this onerous tax to come back," said Scott Whitaker, president and CEO of the Advanced Medical Technology Association (AdvaMed). "We've said all along this is bad tax policy, bad health policy, and bad for patients and innovation. And a bipartisan majority in both the House and Senate agrees. We've got the votes to end this tax once and for all; we need Congress to act."
Although the device tax has been suspended since 2016, if Congress does not act by the end of the year it will be back in force and with it a $20 billion tax increase on the industry. While the tax was in effect from 2013-2015, the medtech industry shed nearly 29,000 U.S. jobs and had to cut back dramatically on R&D and other infrastructure spending.
The Tax Foundation credits the 2017 tax reform legislation with the improvement in the U.S. competitiveness ranking. However, any benefit from tax reform would be wiped out for the medical technology industry should the excise tax return. According to a study from E&Y, the industry is estimated to receive a $9.9 billion decrease in federal income tax liability over the 2018-27 period from tax reform. But this would be offset by the approximately $16.7 billion in additional tax liability for the same period if the tax came back.
