5 Fundamental Flaws of the Medical Device Tax

The Pacific Research Institute released a new study that points to five core tax principles and how the 2.3% medical device tax violates each.

The medical device tax hurts doctors, patients, and manufacturers, according to a new study released today by the San Francisco, CA-based think tank, the Pacific Research Institute.

“As the congressional session winds down, Congress has some unfinished business – taking action to repeal the medical device tax,” said Wayne Winegarden, author of the report. “The medical device tax is bad tax policy that has increased patient costs, reduced access to life-saving technology, and reduced profits and jobs. Repealing the tax would bring many benefits, such as increased medical innovation and better-quality care for patients.”

The House of Representatives voted in July to permanently repeal the 2.3% medical device tax that was included in the Affordable Care Act in 2010. The tax has been highly criticized on both sides of the political aisle and has been suspended twice. It’s now up to the Senate to end the medical device excise tax once and for all.

Looking at the tax through the lens of ideal tax policy, the new study shows that the tax is a failure. Winegarden cites recent data showing that Congress isn’t even collecting the revenue it anticipated – $2.1 billion below estimates between 2013 and 2015. Winegarden is a senior fellow in business and economics at the Pacific Research Institute. He is also the principal of Capitol Economic Advisors.

The study points to the five core tax principles and how the 2.3% medical device tax violates each.

By Amanda Pedersen | MD+DI

Image Credit: Getty Images

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About Peter Coffaro 699 Articles
A growth-driven and strategic executive, Peter Coffaro commands more than 20 years of progressive management success within the orthopedic industry. Recognized by MedReps.com as one of the top medical sales influencers in the industry; he has 10 years of combined sales management experience and has held positions as a Director, General Manager and Distributor. Peter has worked for some of the top orthopedic companies in the world - Zimmer, DePuy and Stryker. He is also the founder of OrthoFeed: a popular blog that covers orthopedic news and emerging medical technologies. Peter is a three-time Hall of Fame award winner at Johnson and Johnson and has an extensive background in organizational development, business development, sales management, digital marketing and professional education. Peter holds a B.S. degree in Biology from Northern Illinois University.

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