Following recent news that a major U.S. medical device manufacturer plans to cut five percent of its workforce because of a new medical device excise tax, U.S. Senator Kelly Ayotte (R-NH) renewed her call for repealing the tax, which is scheduled to take effect in 2013 as part of President Obama's health care law. Michigan-based Stryker Corporation announced on Thursday that it plans to lay off five percent of its workforce in order to remain profitable. Senator Ayotte, a member of the Senate Small Business Committee, is cosponsoring legislation that would repeal the Medical Device Tax.
"If this tax goes into effect, it will cause profitable businesses to lose money, cut investment budgets, and eliminate jobs or move them overseas," she said. "Today's announcement is an example of that, and I will continue to work hard to repeal this burdensome new tax."
In October, Senator Ayotte visited Manchester-based Corflex, a manufacturer of orthopedic medical products. During her visit, CEO Paul Lorenzetti voiced his concerns about the Medical Device Tax. While the company has experienced steady growth and now employs 43 workers, Lorenzetti said Corflex could struggle to remain competitive because under the new tax, medical devices ranging from surgical tools to bed pans would face a 2.3 percent excise tax. The tax is especially burdensome for start-up medical device companies because it is not based on company profits, but rather, takes a cut of every sale made. New Hampshire is home to about 50 medical device companies employing approximately 3,800 people.