Minnesota Senators against Medical Device Tax

Published On: 26th January 2015

From the internet

When an item is taxed, it has to be paid because that is the law.

The companies that make up the medical device industry, many of which are located in Minnesota, have been pushing against the Obamacare-related tax on their products since before the tax was implemented. They lost the first round, but it seems they may see a turnaround.

It was reported by Minnesota Public Radio that advocates are in a good position to push through a repeal of the tax after the U.S. Senate saw a majority of Republican wins in November. The Republicans that are against the tax are joined by Democratic opponents in which two of them are from Minnesota.

Both Senators Al Franken and Amy Klobuchar have argued against the medical device tax for years, citing that such a tax does more harm than good.

When the Affordable Care Act was implemented, a 2.3 percent medical device tax was put in place. This tax took effect at the beginning of 2013.

The medical device industry, which has now spent approximately $30 million lobbying against the tax, states that it kills jobs. Data from the Congressional Research Service, a nonpartisan research group, says the services have been largely muted. In 2013, Medtronic, based in Fridley MN, said that the tax had only cost them half of what they had originally forecast.

But it is said the tax has caused other issues. According to the U.S. Treasury Department, the IRS was having issues figuring out how to apply the tax for the 2014 tax season.

As of now, the opponents of the tax envision a spring victory if lawmakers follow through on their promise to repeal the tax.

The tax was estimated to raise around $3 billion per year, which is just a portion of the money that is raised within the Affordable Care Act to pay for the insurance. The pharmaceutical and health insurance industries also pay levies as a part of the law on the theory that those industries are among those that will gain the most money from the millions of new customers that they will receive.

While Medtronic said that the tax has only cost them half of what they expected, them and St. Jude are among those that can keep millions of dollars more of their profits if the repeal of the tax goes through.

If the repeal does occur, it is due to Congress hearing six years of arguments. The lobbying campaigns behind the repeal of the tax have been sophisticated and long. Some say that this is the perfect example of how to lobby in a way that gets things done. The strategy and the message have been clear and focused one single matter.

The industry has been able to conduct such a well-organized campaign because they say that the tax is poorly designed. This is a case that they have made very aggressively to lawmakers.

 

Sources: http://www.bizjournals.com/twincities/morning_roundup/2014/12/will-the-medical-device-tax-be-dead-by-spring.html

http://www.mprnews.org/story/2014/12/22/medical-device-tax