Medical Device Excise Tax (MDET). Click to keep reading…

08 Nov Medical Device Excise Tax (MDET). Click to keep reading…

Chinese Tariffs aren’t the only reason that CEO’s are worried about their profits and ability to compete in the global marketplace. Unless it is suspended by the end of the year, a provision in the Affordable Care Act will add a 2.3% excise tax on the price at which some medical devices are sold. The tax was enacted in an effort to pay for Obamacare. If the tax isn’t repealed, medical device manufacturers will be faced with lower profits, smaller R&D budgets, and stagnant innovation. 

In 2018, the Tax Foundation made the following excise tax conclusions:

• The medical device tax fails most tests for good policy and is fundamentally flawed in its structure.
• New research shows that many of the predicted negative effects from the medical device tax occurred, both to the companies and to consumers.
• In 2013, the medical device tax lowered industry research and development spending by $34 million.
• The tax is responsible for the loss of approximately 21,800 jobs from 2013 to 2015.

The report’s authors concluded that “the medical device tax is an economically flawed tax, which raises prices for consumers, lowers job opportunities, and results in less investment in the industry.” 

Check out the MPO Magazine article to learn more about MDET and it’s potential economic impact.