Fox Business reported today that more that 400 companies have sent a letter to Congress urging repeal of a $20 billion medical-device tax scheduled to go into effect in 2013. This is one of many taxes scheduled to go into effect after the 2012 election–the purpose of the tax increases is to attempt to pay for Obamacare. The companies are asking for a repeal of the 2.3% excise tax on medical-device manufacturers.
There were two letters–one to the House of Representatives and one to the Senate. The letters stated:
“We believe that implementation of this $20 billion excise tax will adversely impact patient care and innovation, and will substantially increase the costs of health care.”
One of the things to remember when we hear complaints about the cost of drugs and medical devices in America is that a very large percentage of what we pay goes to research and development of new drugs and devices. If we intend to keep moving forward in medical science, we need to allow the companies developing drugs and devices to reap the rewards of their research and development. Like it or not, profit is a strong motive–it works. To impose higher taxes on medical device manufacturers will increase the cost to the consumer (tax hikes on corporations are always passed on to the consumer–the companies never pay them!).
The best solution to this problem is twofold–first repeal the tax, then repeal Obamacare.