The Boston Herald has joined the chorus of voices decrying the device tax. In a recent op-ed piece, the paper questioned the logic of the American Jobs Act in general and the device tax in particular, arguing that job increases Obama's policies might create would be offset by layoffs stemming from the tax provisions of the Affordable Care Act.

September 19, 2011

2 Min Read
'Boston Herald' Sides with Advamed in Push to Repeal Device Tax

The Boston Herald has joined the chorus of voices decrying the medical device tax. In a recent op-ed piece, the paper questioned the logic of the American Jobs Act in general and the device tax in particular, arguing that the job increases Obama's policies might create would be offset by layoffs stemming from the Affordable Care Act's tax provisions.

As the article explains, Health and Human Services Secretary Kathleen Sebelius is announcing that the U.S. government will invest $700 million of funding generated by the Affordable Care Act to create thousands of new jobs. The funding will be used to renovate and construct community health centers, Sebelius says. The thing is, practically everyone seems to agree that the medical device tax provision of that act are expected to lead to at least some layoffs. A recent report released by Advamed predicts that the tax could put 43,000 of this country’s medtech industry employees out of work.

 

Sebelius has stated that the Affordable Care Act would create new jobs. But, as Advamed has suggested, the jobs added to renovate community health centers could be outweighed by layoffs resulting from the legislation's device tax provision. 

Sure, Advamed is a trade organization whose job it is to look out for the medtech industry. When Advamed announced the release of the report, it didn't come as much of a surprise the most of its findings backed up pretty much everything that the organization had been saying all along about the tax: it's going to hurt innovation, make the U.S. less competitive, lead to layoffs, etc. But, on the other hand, those weren't exactly startling conclusions anyway. And the report itself doesn’t nail down a specific number of layoffs (as many of the summaries of it seem to suggest) but estimates a range of employees who might get cut as a result of the added tax burden.

 

But, one could ultimately say with a high degree of confidence that the tax will likely lead to thousands of layoffs—as vague as that prediction might be. Which makes it ironic that Sebelius expects the Affordable Care Act to add “thousands” of jobs.

 

Last week, Boston Scientific CEO Ray Elliott referred to the tax as an outrage: “It is soaking one of the last remaining industries in this country that pays (higher-than-average wages). We’ve been very clear: We will have a lot less employees, if somebody tags us with a hundred million dollars worth of taxes.”

 

Brian Buntz

Related content:

US Device Tax Would Hurt Jobs, Innovation
Congressman Lance Renews Push to Repeal Device Tax
Study Considers How Medical Device Tax Will Affect U.S. Employment
Device Tax? Readers Weigh In on the Tax and Healthcare Reform

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