The Ohio House of Representatives today passed House Concurrent Resolution 6, which urges Congress and President Barack Obama to repeal the new medical device tax that was included in the Patient Protection and Affordable Care Act.
State Representative Matt Huffman (R-Lima), who jointly sponsored H.C.R. 6 with State Representative Andrew Brenner (R-Powell), says that the $30 billion medical device tax would harm job creation, deter medical innovation and increase the cost of health care.
“Medical technology and innovation spurs much of our nation’s economic activity, in addition to encouraging life-saving medical advances,” said Rep. Huffman. “Taxing this industry will not only hurt job creation in the U.S. and in Ohio, but also impede medical innovation. I encourage President Obama and members of Congress to reconsider this damaging tax and put the well-being of American citizens first.”
“The United States leads the world in medical technology, but the device tax threatens that leadership because it will put an additional burden on medical device innovators already struggling under the weight of America’s uncompetitive tax system,” Rep. Brenner said. “Congress should repeal it before it can do more damage to American innovation.”
The 2.3 percent federal excise tax is levied on the sale of taxable medical devices by manufacturers, producers and importers of such devices. A study by the Manhattan Institute concluded that the medical device tax will almost double the medical device industry’s total tax bill and could result in the loss of up to 43,000 jobs in the medical technology industry. Additionally, because the tax is imposed on sales rather than profits of medical device manufacturers, the tax will be particularly damaging to startup companies.
According to the Advanced Medical Technology Association, medical technology creates more than two million jobs directly and indirectly all over the United States. BioOhio, the state bioscience industry association, reported that Ohio medical device and equipment manufacturers employ more than 22,000 workers throughout the state, and another 5,000 to 7,000 Ohioans are employed by companies that provide critical services such as product design, testing and clinical trial consulting to these manufacturers.
The medical device tax has the potential to harm the United States’ global competitiveness, stunt medical innovation and restrict the ability of patients to receive the life-saving medical devices and care they need.
H.C.R. 6 received strong bipartisan support in the Ohio House.