Congressman Charlie Dent joined his colleagues Rep. Erik Paulsen (MN-3), Ron Kind (WI-3) and Jim Gerlach (PA-6) in introducing legislation, H.R. 523, to repeal the medical device act contained in the Affordable Care Act. This tax took effect on January 1st and companies have already laid-off employees because of it.
"If you were looking for a textbook example of a blundering government enacting a law that raises health care costs, destroys jobs, curtails innovation and hurts patient care -- you'd come up with the medical device tax," Dent said.
The $30 billion tax is applied to the revenues of affected companies -- not their profits. A new innovative company in the field would be heavily damaged as their available cash flow, vital to a start-up, is sucked up by this tax.
In this economy, the true damage of this tax is in the number of jobs that it will cost. There are over 8,000 medical device firms in the United States employing over 420,000 workers. Already, major firms in the field have announced either lay-offs or the end to planned expansions in the US. Just last week Boston Scientific announced that it would be cutting between 900 and 1,000 jobs because of the impact of this tax. As many as 43,000 jobs could ultimately be lost based on economic projections.
"Enough is enough," said Dent. "This isn't about opposing the President's health care plan. This is about Congress working together in a bipartisan way to save American jobs."
The 15th District represented by Dent hosts many biomedical companies whose continued growth and profitability are threatened by the tax. These include but are not limited to: Aesculap, Boas Surgical, Biomed, BBraun, Olympus, Orasure and Precision Medical Instruments.
"These employers provide good jobs that help feed, clothe and shelter hundreds of workers and their families and this pernicious tax threatens those jobs. This tax needs to be surgically removed from the Affordable Care Act," Dent concluded.
NOTE: The tax is set at 2.3% of the sale price of the taxable medical device.