Medical device tax: Survey says jobs are on the line

December 17, 2012 by MassDevice staff

The Medical Imaging & Technology Alliance's medical device tax impact survey indicates that more than 40% of member company executives anticipate job losses as a result of the 2.3% medtech levy.

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A substantial portion of surveyed medtech executives said the 2.3% medical device excise tax would lead to layoffs in the U.S., according to tax impact survey conducted by the Medical Imaging & Technology Alliance.

The respondents, executives from MITA members companies, said they expected to pay more than $287 million dollars in additional taxes next year.

In the survey 41% of participants anticipated job cuts that would impact manufacturing, sales, management and service workers. Nearly 30% also predicted a reduction in research and development funding.

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"This burdensome tax is bad policy, and it has left manufacturers with little choice but to reduce their workforce and cut research and development – none of which create economic value or enhance patient care," MITA executive director Gail Rodriguez said in prepared remarks. "Such a large new tax jeopardizes thousands of American jobs in a difficult economic climate and poses a serious threat to innovation of new life-saving imaging technologies."

Rodriguez said the medical device industry supports more than 400,000 jobs in the U.S. and MITA urged Congress to take action immediately to prevent the tax and ultimately repeal it, he added.

Warnings of layoffs have been a big part of discussions about the medical device tax, and some companies have gone as far as citing the levy as the driver for job cuts ahead of implementation.

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