The junior senator from Massachusetts, Sen. Ed Markey (D.-Mass), wants to eliminate the medical device tax and replace the lost revenue by eliminating tax loopholes for the energy industry.
Markey yesterday introduced S. 844, the "No Taxation on Device Innovation Act," which would repeal the 2.3% excise tax on all U.S. sales of prescribed medical devices enacted as part of Obamacare.
Markey, who received $76,100 in donations from the medtech industry last year, would replace the estimated $29 billion in lost revenues by banning "last-in, 1st-out" accounting for "the largest oil companies." His bill would also ban free offshore drilling in public lands in the Gulf of Mexico, forcing oil companies to pay royalties for the right to drill.
"Medical device companies in Massachusetts and across the country are at the forefront of a biomedical revolution that is supporting economic growth and developing life-saving technologies," Markey said in prepared remarks. "It’s time to end 19th century tax breaks for highly profitable oil and gas companies that need no assistance and invest in 21st century innovation and companies that create jobs and save lives. The No Taxation on Device Innovation Act trades oil and gas company corporate welfare for the health and welfare of the American people and economy."
Markey’s bill isn’t Capitol Hill’s 1st shot at repealing the medical device tax. Rep. Erik Paulsen (R-Minn.) has spearheaded efforts in the House to repeal the medical device tax and is the lead sponsor of H.R. 160, the "Protect Medical Innovation Act of 2015." There are 276 co-sponsors of Paulsen’s bill, including 36 Democrats.
Sen. Orrin Hatch (R-Utah) is the sponsor of the Senate’s companion bill for repealing the medical device tax, S. 149 or the "Medical Device Access & Innovation Protection Act." The measure has 34 co-sponsors, including 5 Democrats.
Markey’s bill is unique in a couple of ways: It’s sponsored by a Democrat and includes a so-called "pay-for" to make up for the lost revenue. The bill had no co-sponsors as of this morning, but is likely to win favor with Senate Democrats, many of whom have said they favor repealing the tax but wouldn’t sign a bill that didn’t include a pay-for.
"This legislation is a fair and deficit-neutral solution to repealing the medical device tax that ensures continued investment in an industry that is at the heart of the Massachusetts innovation economy. I hope my colleagues will support this legislation that promotes fairness, innovation and economic growth," Markey said.
"We are grateful to Senator Markey for his leadership in eliminating this punitive tax on medical innovation. The repeal of the medical device tax would provide immediate relief for over 400 medical device manufacturers in Massachusetts," MassMEDIC president Thomas Sommer said in a statement. "As Massachusetts is home to the 2nd-largest concentration of medical device development and manufacturing in the nation, medtech companies in the Commonwealth have shouldered a disproportionate share of this tax."
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