Medical device tax becomes a political pinball covers the medical device tax

The medical device tax slated to go into effect next year has become an issue in the Republican race for the White House and a pair of Senate contests.

Mitt Romney, the former Mass. governor who’s all but assured to win the GOP nomination ahead of the November presidential ballot, decried the tax while on the stump at NuVasive’s (NSDQ:NUVA) California headquarters this week. And the tax is in play in Sens. Amy Klobuchar’s (D-Minn.) and Scott Brown’s (R-Mass.) defenses of their seats.

A analysis shows that the levy, a 2.3% excise tax on U.S. sales of medical devices, could draw substantially more than the $2 billion a year it’s intended to raise.

"I just don’t think the president and his people understand that as they burden enterprise with taxation and with regulation, they hurt all of us," Romney said, according to ABC News. "These dreams that people like [NuVasive CEO Alex Lukianov] have had – these dreams are crushed, tax by tax, regulator by regulator, regulation by regulation. Washington is crushing the dreams, and crushing the dreamers. We can’t let it happen.

"The taxation burden and the regulatory burden that the president’s people have put in place has slowed down the recovery, and made this the most tepid recovery from a recession that we’ve seen since Hoover," he added. "I’m absolutely convinced that it’s time to replace the president with someone who understands what it takes to get good jobs and a rising economy and I intend to do that."

Lukianov said the medical device tax could mean layoffs for 200 NuVasive workers next year.

"These are issues that are not acceptable to the growth of our industry and really are not appropriate for our company," he said. "So we need to do everything we can to push back on these issues, to push back on Obamacare, to repeal it."

The tax has also reared its head in Minnesota, where Klobuchar is fending off challengers including Peter Hegseth, Minnesota Public Radio reported. Klobuchar’s vote for the Affordable Care Act has given her opponents an opening; Hegseth used it to claim that the law will cost Minnesota about 2,700 med-tech jobs.

“If the tax is allowed to take effect, nonpartisan experts expect major job reductions, with more than 2,700 med-tech jobs lost in Minnesota alone. The 83,000 Minnesotans employed as an indirect result of the industry will also be holding their breath,” Hegseth wrote in a March 22 op-ed in the Pioneer Press.

Klobuchar’s support for the health care law notwithstanding, she was 1 of the first legislators to seek to alter the med-tech tax. In 2009, an amendment to the ACA bill she co-sponsored with then-Sen. Evan Bayh (D-Ind.) that would have excluded medical device companies with less than $100 million in annuals sales failed to make it into the law.

Klobuchar was not available for comment.

The race for the Bay State’s junior Senate seat has also featured some rhetoric about the tax. This week Brown told that he’s putting his eggs in the repeal basket, both for the device tax and for the health care law.

“It doesn’t help to modify it by going to a lower rate,” Brown told us. “No, the bottom line is the [tax] is just there to pay for a health care bill I didn’t support in the first place.”

Also this week, proxies for Brown and challenger Elizabeth Warren traded barbs over the levy, according to the Springfield, Mass., Republican.

“Elizabeth Warren’s vigorous support of Obamacare and its medical device tax will translate directly into job losses in Massachusetts,” Jim Barnett, Brown’s campaign manager, told the newspaper in prepared remarks. “New taxes taking effect in 2013 will harm the medical device industry in Massachusetts, which consists of more than 400 companies employing nearly 25,000 people. Scott Brown opposes Obamacare, and has already voted to repeal it. He believes health care should be left up to the states to decide on a case-by-case basis as we did in Massachusetts.”

"If Scott Brown and his fellow Republican hardliners get their way, they will kill the progress that has been made in providing health care coverage to millions of people, from young adults to seniors, and ending lifetime insurance limits and discrimination on pre-existing conditions," retorted Warren press secretary Alethea Harney. "Elizabeth believes problems with the medical device tax can be fixed without cutting health care coverage for millions of people or forcing Americans to fight the whole health care battle all over again."

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