Reimposing the medical device tax would cost 21,000 jobs, report says

The medical device excise tax would cost 21,000 full-time jobs and a $1.7 billion reduction in gross domestic product if it returns next year, according to a report released this week by the nonprofit Tax Foundation. 

The tax was part of the Affordable Care Act and puts a 2.3 percent levy on most  medical devices sold in the U.S. It was intended to help fund the ACA and was in effect between 2013 and 2015, but has been suspended since. 

The tax is set to return Jan. 1, unless Congress extends the moratorium or repeals the tax.

The report from the Tax Foundation, which collects data and publishes research studies on U.S. tax policies, said the medical technology industry lost 29,000 jobs when the tax was in place from 2013 to 2015. It estimated the industry would lose an additional 21,000 jobs over two years and $1.7 billion in GDP if it comes back in 2020.

"The tax fails to lower healthcare costs for consumers, but increases costs and burdens on the healthcare industry," the report stated.

The foundation also said medical technology startups and smaller companies would be disproportionately affected by the tax.

Read the full report here

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