A new study released by the Pacific Research Institute makes the case that the controversial medical device tax hurts doctors, patients, and manufacturers.
PRI senior fellow in business and economics, and author of “The Benefits of Repealing the Medical Device Tax,” Wayne Winegarden argues that as the congressional session winds down, Congress should act to repeal the medical device tax before it adjourns.
“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,” he writes.
The medical device tax imposes a 2.3 percent tax on such common items as pacemakers, CT scan machines, dental instruments, and artificial joints. The tax is currently suspended.
Analyzing the medical device tax through the lens of ideal tax policy, Winegarden concludes in the study that the tax is a failure. He cites recent data showing that Congress isn’t even collecting the revenue it anticipated — $2.1 billion below estimates between 2013 and 2015.
The study also shows that the tax has led to lower investment in research and development in new medical technology, a significant decline in industry sales (nearly $27.9 billion between 2013 and 2015 according to one estimate cited in the study), and tens of thousands of lost jobs.
That Congress has acted twice to enact a medical device tax moratorium is a good thing, but Winegarden notes that it is only a temporary action. The study concludes that Congress should repeal the tax to eliminate any uncertainty surrounding its possible future re-implementation.