What medical devices are taxable

The tax applies to medical devices such as pacemakers, advanced imaging technology Cat Scan, MRI and ultrasound equipment , artificial joints, surgical gloves, and dental instruments. Take imaging technologies as an example. Clearly, policy should not discourage greater use of these crucial medical technologies nor increase their price.

The tax violates the commonly accepted principles of sound taxation and imposes unnecessary economic costs.

what medical devices are taxable

Policies that lead to some combination of higher medical costs and less availability of medical technologies worsens the problems facing the U. As a consequence, the right policy response is to permanently repeal the medical device tax. Some may reduce the profitability of the company, possibly turning a profitable company into a money loser.

Wayne Winegarden Contributor. Other manufacturers may be unable to absorb these costs causing them to lose money. Toward this end, there is a current repeal bill that has been approved by the House of Representatives on July 24, 2018. For instance, the tax is designed to tax a subset of medical devices; therefore, by conception, the tax imposes distortions into the medical device market, and creates incentives for manufacturers to seek loopholes and exemptions to benefit their products at the expense of competitors.

The only outcome that is not possible is that the tax does not distort the imaging technology market. While as of October 2018 it is unknown whether a repeal vote will take place in the Senate, based on the economic merits, it should.

Repeal the Medical Device Tax

As the Joint Economic Committee documented, the medical device tax also violates the widely agreed upon principles of a sound tax system. How the company will deal with these costs is unknown. The medical device tax also harms smaller start-up companies more than larger, more established, companies because start-up businesses typically have thinner profit margins.

But, in the case of the medical device tax a 2. Further, the tax will not impact manufacturers of the same device equally. Share to facebook Share to twitter Share to linkedin. The medical device tax is also hidden from the consumer who is generally unaware that this tax is priced into the costs of the product; has been applied inconsistently across products due to exemptions and short-term suspensions, which create difficulties for firms to plan and manage the tax; and, subjects some medical devices to double taxation.

what medical devices are taxable

Imaging technologies help physicians detect diseases in their earliest stages when they are most treatable. My research explores the connection between macroeconomic policies and economic outcomes, with a focus on the health care and energy industries. Further, patient welfare is also negatively impacted.

(Part 2 of 6) Medical Device Excise Tax - OMTEC 2012 Opening Panel Discussion

Machine in hospital AI. The medical device tax has an undeniably negative impact on the health care sector.

Passing a series of moratoriums is insufficient, however. Oct 24, 2018, 10: The medical device tax was never an economically sound policy, which explains why both the Senate and House of Representatives have separately passed repeal legislation, and twice implemented a moratorium that suspended the tax.

what medical devices are taxable

Eliminating the medical device tax will help encourage medical innovation and improve the quality of care provided by the U.