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The medical device tax: An abject failure

| Wednesday, Sept. 17, 2014, 9:00 p.m.

ObamaCare's 2.3-percent tax on gross U.S. sales of medical devices is an abject failure that Congress must repeal.

Writing for Forbes.com , health-care expert and Pacific Research Institute head Sally Pipes says the Treasury Inspector General for Tax Administration reported in August “that just about everything that could go wrong with the medical device tax has.”

Yielding just three-quarters of the $1.2 billion that the Internal Revenue Service projected it would between April and September 2013, its problems include:

• IRS inability to tell which companies owe the tax, reporting errors that have firms paying millions of dollars too much or too little and IRS errors costing more than 200 companies $700,000-plus in unwarranted penalties

• The tax's cost forcing cuts in capital investments and research and development spending, plus higher medical-device prices that depress sales

• And, per an industry survey, 33,000 fewer jobs in the tax's first year as not-yet-profitable startups struggle to pay it.

Unintended or not, these consequences were not unforeseen. Ms. Pipes notes 34 Democrats were among 79 senators voting for a March 2013 nonbinding repeal resolution, with the House “similarly on record” and “enough support to override a presidential veto” likely.

In other words, there's every reason to repeal this tax.

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