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Paulsen to President: Higher Taxes on Medical Innovation Not a Prescription for Jobs


Location: Washington, DC

Rep. Erik Paulsen (MN-03), Acting Chairman of the Ways and Means Subcommittee on Human Resources, released the following statement after President Obama joined CBS Minnesota's Frank Vascellaro for an interview on Thursday night. During the conversation the President was asked about the new 2.3% excise tax on American-made medical devices set to go into effect in 18 days.

Rep. Paulsen was able to garner overwhelming bipartisan support for his bill to repeal the dangerous new tax, which easily passed the House in June. Now, 190 days later, Rep. Paulsen's efforts have been joined by a chorus of Democrat Senators - including Minnesota Senators Amy Klobuchar and Al Franken - asking for the repeal of this tax which could cost this vibrant industry 10% of its workforce.

"Raising taxes on U.S. medical device innovators who have developed some of the world's greatest life-improving and life-saving technologies is simply not a prescription for American success, economic growth, or job creation. I've traveled across Minnesota, and across the nation, visiting with dedicated entrepreneurs, doctors, scientists, manufacturers, and the 400,000 employees who support this American success story. They've all shared with me the same message: this onerous new tax will not only cost our country jobs and innovation, but more importantly, it will cost American patients access to cutting edge medical products and treatments.

"The president said last night that this new tax is going to be "great for business' and that these innovators are "doing really well right now'. Mr. President, tell that to the employees of innovators like Cook Medical, Welch Allyn, Stryker, St. Jude's, Zimmer, Hill Rom, and Boston Scientific, all companies who have recently announced plans to curtail U.S. expansion, shift production abroad, or lay off U.S. workers due to the impending tax. Those companies are not alone -- a recent study estimates 43,000 U.S. jobs will be at risk after the tax goes into effect. Many of those layoffs will come from small businesses and new startups which account for 80% of the industry.

"President Obama claims Obamacare will create 30 million new medical technology customers. This "windfall" to the industry is a convenient myth for the President and Obamacare supporters. In reality, utilization of medical devices is heavily tipped towards America's aging population. Medicare beneficiaries, both elderly and disabled, are disproportionally large users of medical devices and already have coverage through that program. Similar state level reforms in Massachusetts have not resulted in more revenues for medical device innovators.

"Plain and simple, this tax is bad policy and will cost America jobs. The president has spoken time and time again of the need for more American manufacturing. It's time for his actions to match rhetoric. It's time to repeal this disastrous new tax."

Paulsen, a champion of small business and advocate of free enterprise, entrepreneurship, and innovation, currently serves on the House Ways and Means Committee and is co-chair of the Congressional Medical Technology Caucus.

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