House Rep. Dan Maffei (D-N.Y.) this week introduced a new bill that seeks to repeal the 2.3% medical device tax, making up for the $30 billion in lost revenue by cutting tax breaks for big oil and gas companies.
The proposed pay-for may to be more popular with Democrats, who previously balked at attempts to recoup lost tax revenue by taking a stronger hand in reclaiming over-paid health insurance tax credits granted to families.
"The bill’s offset for the repeal of the medical device excise tax repeals 3 costly tax incentives that subsidize the big major integrated oil companies (Exxon-Mobil, Chevron, Shell, and BP) to produce oil – something they would be doing anyway," according to a press release from Maffei’s office.
The Congressman called the move a "responsible" measure to protect the medical device industry, which has a large presence in New York. The state is home to companies such as Misonix (NSDQ:MSON), Sirona Dental Systems (NSDQ:SIRO), AngioDynamics (NSDQ:ANGO) and others.
The repeal bill would make up for the lost medtech tax revenue by eliminating 3 specific oil company tax incentives: a Section 199 deduction for domestic production, a "Last-in, First Out" new inventory deduction and a "dual capacity taxpayer" subsidy for foreign oil production.
New York bioscience and medical technology lobbying group MedTech voiced support for Maffei’s initiative without endorsing the specifics of the plan.
"MedTech fully supports any and all efforts to repeal the new, nearly $30 billion tax on medical devices," MedTech president Jessica Crawford said in prepared remarks. "By introducing this bill, Congressman Maffei shows the kind of leadership that more policymakers would do well to emulate."
In proposing his new "Medical Device Tax Elimination Act" Maffei is building upon years of involvement with the medical device industry, and he’s making good on a campaign promise.
"I strongly opposed the medical device tax when the Affordable Care Act was passed. At that time I worked directly with local medical device manufacturers like Welch-Allyn to address concerns they had and worked with them to fight the tax," Maffei said in prepared remarks. "During the campaign I said that if elected, I would continue to fight to repeal the medical device tax. This bill fully repeals the tax."
"I will be urging my colleagues in Congress to work together to pass this bill and repeal the medical device tax," he added.
Earlier this week a bipartisan Senate duo proposed an unrelated amendment that also aimed to help off-set some of the cost of repealing the 2.3% medical device sales tax.
Senators Amy Klobuchar (D-Minn.) and Orrin Hatch (R-Utah) offered a non-binding amendment that would establish a deficit-neutral reserve fund, which is to be offered alongside the Senate budget resolution that’s already under negotiations.