A federal tax on medical devices went into effect at the beginning of the year. As part of President Obama’s healthcare bill signed into law four years ago, a 2.3 percent tax will be assessed on companies that produce anything from wheelchairs to pacemakers.

This is harmful to the medical industry and places more hurdles in the way of economic growth. The United States accounts for 40 percent of the global medical technology market, exporting $5.4 billion more than it imports.

That level of production not only benefits the U.S. economy, but makes a positive difference around the world. The federal government should not try to punish these companies, but rather encourage opportunities for growth. A medical device tax achieves exactly the opposite.

The Ohio House of Representatives recently passed a resolution that urges President Obama and Congress to repeal the tax on medical devices. All 60 Republicans, as well as 16 Democrats, voted in favor of the resolution.

Medical device and equipment manufacturers in Ohio employ more than 22,000 people. Placing an added tax burden on top of what these companies already pay can hinder innovation and lead to fewer jobs.

In April, Senator Rob Portman toured the Zimmer Surgical facility in Dover and discussed the harmfulness of the medical device tax. “This is a tax that is anti-job and anti-growth,” he said, expressing concern that it moves jobs overseas.

Innovative start-up companies will be especially harmed because the tax is imposed on sales, rather than profits. In other words, start-up companies do not typically make as high of profits as do more established companies, therefore they would not be hit as hard. However, because the tax is assessed every time the cash register rings, a start-up that is trying to get off the ground with an innovative product or idea will have more difficulty succeeding.

Worse yet is the impact this may have on patients who are seeking life-saving medical devices. Competition in the marketplace drives down prices, but as jobs and businesses are wiped out by this tax, not only are there fewer ideas, but also fewer providers. That causes prices to climb.

Ohio has limited influence on federal issues, but hopefully with increased pressure from other states and citizens, the tax will be repealed.

Featured Posts

Lawmakers Introduce Legislation To Automatically Refund Overpaid Business Taxes


State Representatives Mike Duffey (R-Worthington) and Al Landis (R-Dover) joined Senators Bob Peterson (R-Sabina) and Bill Beagle (R-Tipp City), along with Ohio Tax Commissioner Joe Testa today to introduce legislation that will require the Ohio Department of Taxation to notify Ohio businesses when they overpay their taxes and provide automatic refunds in the form of credits toward future taxes.


Rep. Landis Named Legislator Of The Year By Vietnam Veterans Of Ohio


State Representative Al Landis (R-Dover) was recently named State Representative Legislator of the Year by the Vietnam Veterans of America Buckeye State Council. Representative Landis was awarded a plaque by the VVA Buckeye State Council’s president, Tom Burke, at the organization’s annual fall awards banquet held in Newark, OH.


Rep. Landis Encourages Constituents To Submit Online Legislative Survey


State Representative Al Landis (R-Dover) has set up an online legislative survey in an effort to gain feedback from the residents of the 98th Ohio House District regarding a variety of state issues. The survey can be accessed at www.tinyurl.com/RepAlLandisSurvey.


Rep. Landis Votes To Send State Operating Budget To Governor


State Representative Al Landis (R-Dover) today announced the Ohio House of Representatives’ passage of Amended Substitute House Bill 59, the state operating budget designed to improve Ohio’s business climate, invest in schools, help Ohioans access the care and services they need, give Ohioans greater ability to obtain higher education, and put more money back in the pockets of hardworking Ohioans.