The Medical-Device Tax, Up for a Vote

by Ramesh Ponnuru

Obamacare imposes a 2.3 percent tax on medical devices starting next New Year’s Day. The House of Representatives will vote tomorrow on legislation to repeal it.

Rep. Marlin Stutzman (R., Ind.) argues that the tax puts at risk an industry that employs 20,000 people in his state alone. “This is a job-killer for us,” he says. Companies will move overseas to avoid being singled out for tax increases. Defenders of the tax have been claiming that nothing of the sort will happen, because the tax applies to imported medical devices. But Stutzman points out that the industry produces exports, too, and that other countries are aggressively courting device-makers. (I wrote a column expanding on the argument against the tax back in January.)

I think we’re going to actually have a good number in the House when we vote on it,” he predicts. “This is a tax that is unpopular with seniors, with the medical community, with the business community.” It’s also a tax that has drawn the opposition of many Democrats from states with an industry presence. Democratic senators Al Franken and Amy Klobuchar from Minnesota oppose the tax. So do Democratic Senate candidates Elizabeth Warren of Massachusetts and Joe Donnelly of Indiana.

A Harry Reid spokesman has, however, said that the Senate will not take up the legislation. So we could well see a bipartisan coalition in both houses of Congress for the repeal of this tax being stopped by the Democratic Senate leadership–unless, that is, more Democratic defectors start putting pressure on that leadership.

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