The Advanced Medical Technology Association released a study raising concerns about U.S. jobs after a next tax takes effect. The 2.3% excise tax on medical devices is a provision of the new healthcare law, and will take effect in 2013. If the medical device tax is imposed it “could force companies that would otherwise never leave the U.S. to make difficult choices based on stark economic reality,” explained Diana Furchtgott-Roth, Hudson Institute senior fellow and co-author of a new study. The group points out that the tax will roughly double the device industry’s total tax bill and raise the average effective corporate income tax rate to one the highest effective tax rates faced by any industry in the world.
The study identified the following conclusions as a result of the implementation of the device tax:
- U.S. industry employment and employment compensation could decline. Based on reasonable assumptions, the study estimates the loss of 43,000 jobs in the medical device industry;
- The economic effects of the tax likely would be seen in every state, especially harming states that employ large numbers in the medical device industry;
- Innovation could be stifled, as the new tax must be paid by companies regardless of net income; and
- The cost of medical devices would increase for health care providers and consumers.
To learn more about the AMTA study click here.
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