A quintet of Republican governors is asking Congressional leaders today to repeal the medical device tax, saying the 2.3% levey on U.S. med-tech sales runs "counter to principles of economic growth and job creation," according to a copy of the letter obtained by MassDevice.com.
Govs. Tom Corbett of Pennsylvania, Mitch Daniels of Indiana, Nikki Haley of South Carolina, Robert McDonnell of Virginia and Wisconsin’s Scott Walker sent the letter to Reps. John Boehner (R-Ohio) and Nancy Pelosi (D-Calif.) and Sens. Henry Reid (D-Nev.) and Mitch McConnell (R-Ky.), asking them to support a repeal of the tax, which is part of the Patient Protection & Affordable Care Act.
"As governors of states with a significant concentration of medical technology manufacturers, we believe that this tax could harm U.S. global competiveness, stunt medical innovation and result in the loss of 10s of thousands of good-paying jobs," they wrote. "The United States annually exports %5.4 billion more medical technology than we import and accounts for 40% of the global medical technology market. Our lead has shrunk dramatically in the last decade, and we stand to lose further ground."
It’s the latest round of political pinball over the tax, which has drawn fire from both sides of the aisle. Apart from making an appearance in the Republican presidential nomination, the levy has taken center stage in at least 2 high-profile Senate races: In Massachusetts, where Democrat Elizabeth Warren is battling Sen. Scott Brown (R) to become the junior senator from the Bay State; and in Minnesota, where Sen. Amy Klubuchar (D) is hoping to keep her seat out of the hands of several challengers.
In Minnesota, Klobuchar and Sen. Al Franken have said they’re concerned about the impact the tax will have in the Land of 10,000 Lakes and Rep. Erik Paulsen (R-Minn.) is spearheading a move to kill it outright.
Warren’s exclusive op-ed for MassDevice.com drew national headlines when she revealed her opposition to the tax. Brown used his opposition to the tax as a main campaign plank when he won the late Sen. Ted Kennedy’s seat in 2010 and continues to lobby hard against the tax in his current campaign.
Over the weekend, a prominent Democratic donor, Masimo (NSDQ:MASI) founder & CEO Joe Kiani, told MassDevice.com in an exclusive interview that he favors a tiered tax that would spare smaller companies from its impact.
"I care about taxes, but I care more about social issues such as peace, fairness around the globe, a broader and stronger middle class, clean environment and an end to pre-emptive wars, torture, and the guilty-’til-proven-innocent type of actions and policies that were defining us, a nation that was built on a much bigger and better vision and promise," Kiani told us. "I believe President Obama can help us get closer to the vision of America we share.
"Any tax will harm all companies and cost jobs," he said. "However, the very big companies will be impacted less than the small companies – and some smaller companies could go into red because of the tax, or even fail altogether.
"Companies with $100 million in sales or less shouldn’t have to pay the tax," Kiani said. "It won’t impact revenue, from government’s standpoint, and it would be worth it because [the tax] could devastate young companies. We have to protect the young companies.”