A group of 20 House representatives from California sent a letter to Sen. Max Baucus (D-Mont.) protesting his proposal to levy a $40 billion tax on the medical device industry to help pay for healthcare reform.
The proposal met with howls of protest from the device industry and drew concern and outright opposition from legislators including Sen. John Kerry, Amy Klobuchar, Al Franken, Evan Bayh and Dick Lugar, Govs. Arnold Schwarzenegger, Tim Pawlenty, Jim Gibbons, Mitch Daniels and Gary Herbert.
And despite a report that negotiations are underway to halve the proposed tax, the California representatives wrote that they are “deeply concerned” about its impact on their state’s medical technology sector, the country’s largest device cluster.
“[W]e are extremely concerned that this tax would harm our state’s economy, impede innovation, and ultimately deny access to life-saving medical devices for patients,” they wrote.
Here’s the full text of the letter:
“Dear Chairman Baucus,
“We write to express our deep concern about the annual tax on medical device manufacturers included in your proposal for health reform, America’s Healthy Future Act of 2009. As Representatives of the State of California, we are extremely concerned that this tax would harm our state’s economy, impede innovation, and ultimately deny access to life-saving medical devices for patients.
“Medical technology companies employ more than 112,000 workers in our state, many of them in firms with less that 100 employees. The medical technology sector offers high-paying jobs to not just Californians but thousands of American across the country. So many American jobs have been shifted overseas and this proposal could very well be a job killer. These jobs are tied heavily to research and development, helping to keep the United States at the forefront of innovation.
“Your bill would assess taxes on all manufacturers at a rate necessary to generate $4 billion annually, over ten years. This amount exceeds the total $3.7 billion in venture capital funding raised by the medical technology sector and is roughly half of the $9.6 billion in total R&D investment by the sector in 2007.
“We agree that health reform is needed and should be paid for, but this proposal threatens to crush the very industry that could save billions of dollars in the healthcare system. This $40 billion tax would hamper R&D investment, slow innovation, and cut jobs at a time when unemployment in California is 12.2%. We cannot afford these losses.
“We appreciate your consideration on this issue and look forward to your response.”
|Anne G. Eshoo||Kevin McCarthy|
|Sam Farr||Mary Bono Mack|
|Jackie Speier||Brian Bilbray|
|Linda T. Sanchez||John Campbell|
|Mike Thompson||Ken Calvert|
|Mike Honda||Darrell Issa|
|Susan Davis||Ed Royce|
|Devin Nunes||Jerry Lewis|
|Jerry McNerney||Brad Sherman|
|Loretta Sanchez||Adam Schiff”|