By Rep. Marlin Stutzman
Hoosier work ethic, entrepreneurship, and a drive for excellence have made Warsaw, Indiana, the Orthopedic Capital of the World with innovators like Zimmer, Biomet, and DePuy. Across the state, the orthopedic device industry employs more than 20,000 Hoosiers. Companies like Boston Scientific in Spencer, Cook Medical in Bloomington, and Roche Diagnostics in Indianapolis provide the kind of lasting growth that is critical to economic development at the state and local level.
Today my friend and colleague from Minnesota, Congressman Erik Paulsen and I will convene a meeting right here in Warsaw of leaders in the medical device field from across Indiana. Leading our discussions will be the 2.3 percent excise tax on the sale of medical devices that went into effect on January 1. This $30 billion tax hike was instituted to pay for President Obama's health care law and is killing Hoosier jobs, stifling future innovation, and increasing patients' costs.
A recent study estimated that the medical device tax could cost more than 43,000 jobs nationally and eliminate more than 2,000 jobs here in Indiana. In fact, we've already seen companies put domestic expansions on hold and take a second look at overseas markets. Hoosiers are missing opportunities as Washington increases taxes to pay for more entitlement spending.
Medical device manufacturers understand that success depends on adaptation. Unlocking the next breakthrough takes time and resources, which is why so much hinges on research and development. When medical device companies look over their shoulders at the taxman instead of focusing on the next horizon, the pace of innovation slows.
Because the President's medical device tax is applied regardless of a company's profitability it stifles innovation and increases the time patients wait for new ideas to move from the laboratory to the operating room. Equally devastating, it deters startups and discourages ingenuity. The Santa Clara Valley would have never been Silicon Valley if Washington had taxed computer technologies in the 1980s. Today, Washington's tax policy is preventing similar innovations in the life sciences.
Too often Washington levies taxes with little regard for who pays. Unfortunately, companies saddled with the increased tax burden could be forced to indirectly pass much of the cost onto patients--cancer survivors, returning veterans, and senior citizens.
Instead of eliminating jobs, threatening innovation, and burdening patients, Washington should be celebrating Indiana's success. Last year, I co-sponsored legislation with Congressman Paulsen to end Obamacare's medical device tax and save Hoosier jobs. By taking Hoosier perspectives to the capital, I joined patients, providers, and manufacturers to build a strong movement to repeal this tax. Unfortunately, although the House of Representatives passed this critical legislation, the Senate failed to act last year.
I'm proud to renew the fight to end the medical device tax this Congress alongside a strong, bipartisan coalition. It's time to repeal the medical device tax and make sure that Warsaw holds onto its hard-earned title.