Study calls for repeal of tax

12 April 2013

Just a few months after the implementation of the US medical device tax, and hot on the heels of much criticism for it, a new study has concluded the policy should be repealed.

The Tax Foundation, which conducted the analysis, said the levy would have an adverse effect on the sector, consumers and the wider economy. In short it was a poor tax policy. The tax, which was part of the Patient Protection and Affordable Care Act of 2010, is imposed on gross sales in excess of $5 million and is applicable to importers and producers of medical devices as well as manufactures.

Tax Foundation economist Kyle Pomerleau said that, as well as adversely impacting on employment, innovation and competition, particularly for small and medium sized device manufacturers, the tax would "result in higher health care costs, which undermine the objective of the Affordable Care Act."

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