AdvaMed now wants device tax repeal as part of broader tax code revamp

A major medical device-lobbying group is now pushing for a repeal of a 2.3% industry tax as part of a broader revamp of the U.S. tax code.

AdvaMed staked out its position in response to a new "listening tour" launched by Republican Rep. Dave Camp of Michigan, chairman of the House Ways and Means Committee, and Democratic Sen. Max Baucus of Montana, chairman of the Senate Finance Committee.

Camp and Baucus are collecting feedback for a broader revamp of the U.S. tax code and began their tour in Minneapolis-St. Paul, MN, the epicenter of one of the nation's largest medical device clusters. AdvaMed said it supports their push to reform to tax code, and argues that a reform of the device tax should be part of their larger effort.

"In the context of reforming the tax code to make U.S. business more competitive, repealing the medical device excise tax that went into effect in January is a critical first step to protecting [device] jobs and ensuring a level playing field for … the U.S. in the global economy," AdvaMed president and CEO Stephen Ubl said in a statement.

The U.S. has generated more than two million med tech jobs, AdvaMed notes. And its members have bitterly fought the device tax up through its implementation in January, arguing that it will kill jobs and starve innovation. In announcing support for the Camp/Baucus listening tour, they advance that argument again, with a twist, claiming that the device tax worsens things for a med tech industry already burdened by an "uncompetitive tax system."

Device companies must pay the tax as part of the Affordable Care Act, and it is designed to raise nearly $30 billion over a decade to help fund it. But as AdvaMed notes, the Senate and House have each passed measures calling for its repeal. House Republicans generally want to kill it outright and roll back the health reform law. Democrats that have signed on to the tax repeal push have called for a new funding mechanism to replace it.

So far, the tax remains on the books. But folding its repeal into the broader movement to reform the tax code could work where those other efforts have failed. Other openings may be out there, however. Just last week, the Obama administration delayed the health reform law's employer mandate by an extra year--until 2015. Some observers see that delay as a shot in the arm for device tax opponents.

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