Stefanik Leads Freshmen Letter on Medical Device Tax Repeal to Speaker Ryan
Washington, D.C.–Today, Congresswoman Elise Stefanik (R-NY-21) led a bipartisan group of 44 freshmen Members of Congress in sending a letter to Speaker Paul Ryan (R-WI-01) urging him to include medical device tax repeal language within a larger legislative package before the end of the 2015 calendar year. Congresswoman Stefanik and the lawmakers wrote:
Members from both sides of the aisle understand the negative impact that this tax has on our constituents. This tax inhibits access to the medical devices which patients need to maintain their health and also has an adverse effect on hundreds of thousands of American jobs supported by the medical technology industry.
Under the 2.3 percent excise tax, medical device manufacturers are required to pay the Internal Revenue Service an estimated average of $194 million per month in medical device tax payments. In a competitive global economy, this tax threatens an innovative industry that directly employs 400,000 Americans, generates approximately $25 billion in payroll, and invests nearly $10 billion in research and development annually.
The medical device tax is a tax on revenue, rather than profit, which means that the U.S. device industry is subject to one of the highest corporate tax rates in the world. As you know, American companies represent 38 percent of the global market and this tax threatens our nation’s ability to innovate and stay competitive. Additionally, American companies must pay the tax even in non-profitable years. As companies look to make cuts to offset the tax, research and development is often one of the first items to go. This trade-off undermines the future of the industry and puts the discovery of new breakthrough medical technologies at risk.
Congress is now in a position to mitigate the harmful effects of the medical device tax. As freshmen Members of Congress from both sides of the aisle, we owe it to our constituents to follow through on the promises we made to address this issue before the end of the year. We respectfully ask that you address the medical device tax language in legislation that has the potential to become law, in order to give our nation’s economy and millions of our nation’s citizens the certainty and care they deserve.
For a digital copy of the letter, click here.