Your recent editorial, “Medical devices shouldn’t get tax break” too easily dismisses the broad bipartisan support for the urgent repeal of the medical device tax. Repeal of this onerous tax is widely supported because members of Congress on both sides of the aisle understand the significant and damaging impact on jobs this tax will have.
Already, companies have announced workforce reductions and delays in major capital investments such as new manufacturing facilities. Worse yet, companies are also scaling back investments in research and development which could slow medical progress and harm U.S. leadership in this area.
Medtech jobs contribute more than $14 billion to Minnesota’s economy, and this tax will harm companies there of all sizes. For start-ups with less than 20 employees — two-thirds of the industry — the tax could be the difference between success and bankruptcy. For larger, profitable companies, the tax is a significant blow to the bottom line.
The device exacerbates America’s already uncompetitive corporate tax system.
The United States has the highest corporate tax rate in the world. Medical-device firms currently face an effective tax rate of 35 percent on activities in the United States — compared to 14 percent abroad. The additional levy will make America even less competitive and give companies reason to think twice about investing in the United States.
We applaud Minnesota senators Amy Klobuchar and Al Franken and Rep. Erik Paulsen for their leadership to repeal the device tax.