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Banks Leads Bipartisan Letter to Expedite Medical Device Tax Repeal

January 31, 2017
Press Release

Washington, D.C. – Congressman Jim Banks (IN-03) today, along with seventeen other freshman members of Congress, led a bipartisan letter to House Speaker Paul Ryan (WI-01) urging consideration of a bill to permanently repeal the medical device tax.

 

“Repealing the medical device tax is too important to our constituents and small businesses not to act immediately,” the congressmen said in the letter.

 

The full text of the letter:

 

January 31, 2017

 

The Honorable Paul Ryan

Speaker of the House

United States House of Representatives

H-232 The Capitol

Washington, D.C. 20515  

 

Dear Speaker Ryan,   

 

We write to encourage you to consider fast-tracking consideration of H.R. 184, Protect Medical Innovation Act, authored by our colleagues Erik Paulsen and Ron Kind. President Obama already has suspended the medical device tax for 2016 and 2017, but it is scheduled to go back into effect in 2018. Our legislation to permanently repeal this tax would provide the certainty needed for the medical device industry to continue its research and investment in these critical life-saving innovations. 

 

The medical device industry, which employs nearly 400,000 Americans, is vital to our health care and our economy.  The industry is comprised largely of small businesses.  Of the 7,000 medical device manufacturers in the United States, the vast majority employ fewer than 50 employees.  Many of these are startups that generate little to no sales revenue.  

 

Imposing a 2.3% tax on revenue, rather than income, subjects the U.S. device industry to one of the highest corporate tax rates in the world. Unfortunately, as companies look to make cuts to offset the tax, one of the first items to go is research and development. This undermines the future of the industry and puts the discovery of new breakthrough medical technologies at risk. Additionally, the tax revenue generated from medical devices is approximately $2 billion annually. Relative to the federal budget, this represents roughly one half of one tenth of one percent of government spending. Repealing the tax will not have a meaningful impact on the budget, but a permanent repeal would be significant for these small businesses and their ability to continue to grow. 

 

If this tax goes back into effect, consumers who rely upon these innovative devices that improve their health will ultimately suffer the burden.  The bipartisan support for this legislation demonstrates the recognition from both parties that reinstating this tax would negatively affect our constituents.  As freshmen members, we hope to work together to usher in a new era of cooperation in order to restore faith in our government institutions. Repealing the medical device tax is too important to our constituents and small businesses not to act immediately, and passing this legislation will demonstrate that we can come together with solutions. We ask that you consider moving H.R. 184 as soon as possible in order to give our nation’s small businesses the certainty they need.  

 

Sincerely,

 

Congressman Jim Banks

Congressman Ted Budd

Congressman John Faso

Congressman David Kustoff

Congressman Liz Cheney

Congresswoman Claudia Tenney

Congressman Neal Dunn

Congressman Jack Bergman

Congressman Trey Hollingsworth

Congressman Roger Marshall

Congressman Brad Schneider

Congressman Raja Krishnamoorthi

Congressman Lloyd Smucker

Congressman Jason Lewis

Congressman Brian Fitzpatrick

Congressman Tom O'Halleran

Congressman J. Luis Correa

Congressman Mike Gallagher

 

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Interested members of the press may contact Anna Swick at anna.swick@mail.house.gov

 

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