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Guest Column: Medical Devices Tax Costing Jobs In Indiana
Updated February 27, 2014 6:29 AM | Filed under: Politics
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(UNDATED) - This guest column was written by Sen. Dan Coats.

President Obama is scheduled to speak in St. Paul, Minn., today to discuss a new initiative he hopes will create jobs and stimulate economic growth. The visit is part of his "year of action" push to make Washington more productive in 2014.

Ironically, Minnesota is home to several medical device manufacturers, including Medtronic, one of the industry's largest device makers. Similar to Cook Medical in Bloomington and other Indiana-based companies, Medtronic is paying the price for one of the president's previous calls to action -- the health care law enacted in 2010.

Tucked away in the 2,000-page Obamacare law is a 2.3 percent excise tax on total sales of medical devices. Today this misguided tax is costing jobs in Indiana, Minnesota and across the country.

Since its implementation in 2013, this destructive tax has caused companies to lay off American workers and shelve plans to expand and build new manufacturing plants. The Advanced Medical Technology Association recently conducted a survey of its members and found the device tax forced manufacturers to let go of or avoid hiring 33,000 workers last year.

With over 300 FDA-registered medical device manufacturers in Indiana, this tax slams our state hard. Medical device companies directly employ over 20,000 Hoosiers and the medical device industry indirectly supports thousands of additional Hoosier jobs. These are jobs that pay, on average, 56 percent higher wages than the average wage rate in Indiana.

The tax is particularly unfair because it is assessed on the gross sales of companies, not their net profits. As a result, it is especially harmful to companies that are not yet profitable and may be struggling to launch a new innovation to save and improve lives.

Additionally, the tax is limiting research and development of life-enhancing and lifesaving devices, such as artificial knees and catheters used in heart procedures, that help people overcome significant health challenges.

Rather than encourage job growth and medical innovation, this tax delivers a significant blow to the companies it affects and may lead to higher health care costs for consumers.
To preserve jobs and spur development of these valuable devices, I have joined with Sen. Amy Klobuchar, D-Minn., Sen. Orrin Hatch, R-Utah, and others on bipartisan legislation that would fully repeal the tax.

During a debate on the Senate budget in 2013, 79 Senators voted for an amendment that called for a repeal of the medical device tax. The House of Representatives already has passed legislation to repeal it. With such strong support from Republicans and Democrats to permanently eliminate this harmful tax, President Obama should join with the bipartisan majority in Congress on this issue. Any serious call to action on jobs and economic growth must include a call to fully repeal the medical device tax.

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