ObamaCare’s Crippling Taxes

Tait Trussell is a national award-winning writer, former vice-president of the American Enterprise Institute and former Washington correspondent for The Wall Street Journal.


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During the ObamaCare debate when the Senate Finance Committee was scouring for more money, it put a “fee” on medical devices, The Wall Street Journal wrote that “the device makers made a ‘strategic mistake’ by not offering Mr. Baucus (D-Mont and chairman of the Senate Finance Committee) more protection money,”  (in other words, political contributions). Baucus’s committee wrote the final Senate version of ObamaCare.

Sept. 8, Senate candidate Pat Toomey, running against Democrat Joe Sestak in the Nov. 2 election, charged that the ObamaCare medical device tax poses a threat to high-tech medical manufacturers. He was meeting with a number of medical technology executives. It included Pete DeComo, the CEO of ALung Technologies, who warned that when the tax takes affect in 2013 it would inhibit investment in research. ALung is a pioneer in the development of respiratory assist technologies, as an alternative to invasive respiratory support. DeComo said, “In an environment with onerous taxation and a complex business environment it has been shown that investor money goes elsewhere.” It is already happening in the United States with more and more venture capital being invested overseas where taxes are lower.

Thousands of products that are necessities of modern medicine, from MRIs and CT scanners to surgical equipment, will be taxed. Even safe sex will get more expensive, because Congress levied the tax on condoms. A spokesman for the Medical Device Manufacturers Association, which represents about 300 small and mid-size makers of medical devices, explained that many of the companies have new devices “that have not yet brought in enough money from sales to make a profit. But they still will have to pay the tax.” He said that 80 percent of the member companies have 50 or fewer employees, as an indication of size.

Tom Sommer, president of Massachusetts Medical Device Industry Council, “blasted the tax, saying it would stifle growth and put innovation in peril….In addition to job cuts and rollbacks on expansion plans, you’re going to see a reduction in R&D spending, innovation in this industry is definitely in jeopardy, which is shameful,” he told MassDevice, an online publication. Dr. James Muller is founder and CEO of InfraReDx, which is developing a spectroscopy catheter to detect the intracoronary composition of plaque. He said, “If you’re successful, they’re going to tax you. It’s wrong and not in the best interest of the U.S. We hear about China and India overtaking us. We’re swimming upstream here.”

In California and Minnesota, legislators have introduced bills to repeal the tax, reported Mark Leahy, CEO of the Medical Device Manufacturers Association. He said the industry would like to see the law modified to give smaller companies relief. This would allow startup companies to ramp up before they’re hit by the tax.

Money aside, the medical device surtax discourages innovations that could improve our health and save our lives, enabling us to help preserve our reputation as the “medicine chest for the world.”

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  • JBB

    They didn't lie. Of course you will not see your taxes increased by a single dime.
    It will increase by many, many dimes.

  • Wesley69

    The hidden goodies in ObamaCare, that will REDUCE the quality of health care for all of us! And to think of the lies that were used to sell this monstrosity! It MUST be repealed. Congress must start from scratch and build a fair and just plan. Don't forget about limits of lawsuits. Lawyers, you need to pay your fair share. After the bill is complete, an amendment needs to be added. All members of Congress, the government, SEIU will have the same plan as all American citizens. In that way, WE THE PEOPLE won't get screwed.

    All tyranny needs to gain a foothold is for people of good conscience to remain silent.
    Thomas Jefferson

  • Spider

    This monstrous bill is clearly unconstitutional. How can it exempt certain groups like the (SEIU) for instance and members of congress and their aids? What would happen if this bill only applied to whites and asians but exempted blacks and hispanics? I think we know the answer to that. I can only hope that this Obamanation is either struck down in court or entirely repealed. We have to put pressure on congress and make this happen. Americas' health depends on it.

  • pyeatte

    Politicians who refuse to represent the people who sent them to Washington…and they want to be re-elected? what dirt-bags. With politicians like these, you don't need enemies.