Blog Tag: Senate Finance
Congressman Erik Paulsen (R., Minn.) and Senator Orrin Hatch (R., Utah) recently introduced bills H.R. 160 and S.149, respectively. Both bills are part of an effort to repeal the 2.3% excise tax on medical device manufacturers and importers imposed by the Affordable Care Act, commonly known as ObamaCare. Guidance from the IRS on the medical device excise tax can be found here.
Where previous attempts to modify or repeal the medical device excise tax have stalled in the Senate, the Washington Times reports that prospects of the repeal passing both houses of Congress are bolstered by the newly Republican-controlled Senate. Further, as is reflected on Congress.gov, both bills have significant bipartisan support, and, according to The Hill, efforts to gain more supporters are ongoing.
But, The Hill reports that Republican and Democrat supporters of the repeal disagree on how to offset the revenue that would be lost should the tax be repealed. Further tempering optimism for repeal of the excise tax is a January 9, 2015 report from the nonpartisan Congressional Research Service, entitled “The Medical Device Excise Tax: Economic Analysis,” which states in its summary that the effect of the tax on the medical device industry will be minor because of the relatively inelastic demand for medical services, the small tax rate, and the numerous exemptions from the tax. Contrary to industry reports on the tax that predict significant adverse effects on innovation and employment, the Congressional Research Service’s report suggests that “most of the tax will fall on consumer prices, and not on profits of medical device companies.”
H.R. 160 has been referred to the House Ways and Means Committee while S.149 has been referred to the Senate Finance Committee. Check back here for further developments on efforts to repeal the medical device excise tax.