Op-Eds

We Should Not Tax American Health Care Innovation

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Washington, July 26, 2018 | comments

The U.S economy has experienced remarkable growth in recent years. But to continue on this path of prosperity for future generations, we need to support investment in forward-looking industries to create good-paying jobs and promote American innovation.

Medical technology provides innovations that help patients across the country live longer, healthier, more productive lives while generating high-paying jobs for millions of Americans. Yet, America’s global leadership in this industry is threatened by a tax on the sale of a broad range of medical technologies.

 

Recognizing this threat to economic growth, earlier this year, we suspended the device tax until the end of 2019. We took this action because of the negative impact the tax had on the medical technology industry. While the tax was in place, companies reported slashing their research and development budgets by as much as $2 billion, resulting in a sharp decline in jobs in the sector.

This solution is only temporary, however. If we don’t permanently eliminate this tax, medical technology companies will not have the long-term certainty they need to invest in future job growth and the research and development to lead the next generation of breakthroughs in patient care and treatment. 

The Problem Solvers Caucus, a bipartisan group of Members of Congress we co-chair, understands the risks posed by the device tax. It’s why our group included a repeal of this tax in our proposal to improve America’s health-care system, improve patients’ lives, and help lower costs. 

Lawmakers — regardless of their place on the political spectrum — recognize that taxing medical innovation makes no sense from either a health policy or a tax policy point of view. And it certainly makes no sense if we want to do what’s best for America patients. 

Just this week the House voted by an overwhelming bipartisan majority (283 to 132) on a bill to fully repeal the medical device tax, with 57 Democrats joining nearly all GOP representatives. We urge our colleagues in the Senate to follow suit and vote for permanent repeal of the medical device excise tax and help support the next wave of American innovation to help patients recover faster, promote jobs, and save people money.

Tom Reed is the representative for New York’s 23rd congressional district, and Josh Gottheimer is the representative for New Jersey’s 5th congressional district.

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