Senator Dan Coats (R-Ind.) today released the following statement after the Internal Revenue Service (IRS) issued the final regulations on how the tax on medical devices under the health care law will be implemented on January 1, 2013:
This final regulation outlining how the administration will implement a $30 billion tax on medical device manufacturers is another example of why Congress must act now to address the fiscal cliff and looming taxes hikes," said Coats. "The medical device tax will cost Hoosier jobs, stifle medical innovation and increase health care expenses. Both sides of the aisle have acknowledged the damaging impacts this tax will have on an industry that not only provides jobs to thousands of Americans, but also enhances the lives of patients around the world. I urge my colleagues to include a repeal of the medical device tax in any final package to address the fiscal cliff."
Indiana is home to more than 300 FDA-registered medical device manufacturers, employing 20,000 Hoosiers directly and another 28,000 indirectly. These jobs pay, on average, 56 percent higher wages than the state wage rate in Indiana.
A 2011 study released by the Advanced Medical Technology Association analyzed the potential effect of 2.3-percent excise tax on the medical device industry. According to this report, an estimated 2,124 Hoosiers would lose their jobs and the tax likely will result in American manufacturers shutting down plants in the U.S. and replacing them with plants in other countries.