POLITICO OPINION: ELECTION COULD ERASE MEDICAL DEVICE TAX
SENATOR DAN COATS
OCTOBER 10, 2012
Politico Opinion: Election could erase medical device tax
By SEN. DAN COATS | 10/10/12 4:31 AM EDT
If there’s one thing Republicans and Democrats agree on these days it is that this upcoming election represents a clear choice for the American people. This election is a choice between two very different visions for our country. It’s an election about jobs. It’s an election about how to best strengthen our economy. It’s an election about how to secure a better future for our children and grandchildren.
While Democrats had total control of both the White House and the Congress, they gave Americans a look at their vision for the country by jamming through an unpopular and partisan government-run health care plan, which included a damaging tax on the medical device industry. Just recently, Cook Medical announced it is scrapping its plans to build five plants that would have created hundreds of jobs because of this new tax in Obamacare. Now as more companies report potential layoffs and plans to outsource good-paying jobs due to this disastrous law, some supporters of Obamacare are changing their tune.
A few weeks ago, Indiana’s former Senator Evan Bayh called on Congress to repeal the medical device tax even though he was the 60th vote needed to pass the president’s health care law that created this tax in the first place. Representative Joe Donnelly, Indiana’s Democratic candidate for Senate, also now regrets the medical device tax despite voting for Obamacare.
The narrative of Democrats who run for federal office in Indiana and other more conservative states is well known. They say one thing at home but then do another thing when in Washington alongside Harry Reid and Nancy Pelosi.
Although intended to fix the nation’s broken health care system, the president’s signature legislation – passed by congressional Democrats – is killing opportunities for job creation in one of our country’s most promising industries.
The medical device industry provides examples of true American success stories. Cook Medical’s founder, Bill Cook, a revolutionary pioneer in the industry started with an idea for a new type of catheter. He began making the device out of the spare bedroom of his apartment, and over time, Cook grew his Bloomington, Ind.-based company into the world’s largest family-owned medical device manufacturer.
Today Cook Medical is an international leader in medical health care manufacturing, producing medical technologies that are enhancing and saving lives across the globe. The vision of Bill Cook not only provided a strong heartbeat for his patients, but also for his community, state and country. The business he built remains an important Hoosier employer with a long history of corporate reinvestment in the state.
Cook Medical is just one of many successful medical device manufacturers in a sector that employs more than 20,000 Hoosiers and 400,000 Americans nationwide. This innovative industry is not just a great contributor to the economy; it changes the lives of individuals. This is an industry responsible for groundbreaking technology such as pacemakers, stents and defibrillators that save thousands of lives each day. It is the same industry that creates cutting-edge artificial limbs and joints to improve the quality of life for disabled Americans, including our brave wounded warriors.
Rather than encourage this important industry, President Obama and supporters of Obamacare are raiding medical device manufacturers to help pay for the health care law. Beginning in January, medical device manufacturers will face a 2.3 percent tax on their gross sales. This tax will be imposed on every device these companies sell, further exacerbating its impact on the industry, on doctors and hospitals who use the devices, and on the consumers that receive them.
The impacts of this tax are staggering, but should come as no surprise to those who supported the law. The medical device tax under Obamacare is estimated to cost the industry more than $20 billion over the next decade and will result in the elimination of good-paying jobs. Along with Cook Medical, Hill-Rom and Stryker also announced they expect to scale back their workforce due to the costly tax. Add this new tax under Obamacare to an already high corporate tax rate and now a once-thriving medical device industry will struggle to compete in a global marketplace. As a result, companies will be forced to ship production and American jobs overseas.
Despite a recent change of heart by some, congressional Democrats voted for President Obama’s deeply flawed health care law and the harmful tax on Indiana’s medical device industry. As an elected representative, what you vote for is what counts. The good news is that Americans can help correct this damage in November by changing the leadership in the White House and the Senate.
Sen. Dan Coats is a Republican from Indiana.
- Implications of the Medical Device Excise Tax on M&A (axialmarket.com)