Small Device Companies May Bear Biggest Brunt of Controversial Tax (OrthoSpineNews)
Large companies making medical devices such as artificial knees are pushing for repeal of the controversial medical device tax attached to the health care law, but the tax’s repercussions may be more damaging in the short run to smaller, less vocal firms.
“It has a disproportionate burden on smaller device manufacturers,” said Kyle Pomerleau, an economist at the Tax Foundation, a Washington-based tax policy think tank.
Small manufacturers spend a higher proportion of their budgets on research and development and could suffer financially, according to Pomerleau, because they often do not turn a high profit starting out. “Smaller companies are ones with bigger expenses compared to revenue,” he said.
The 2.3% excise tax, which went into effect in January, will generate an estimated $30 billion over the next decade to fund the new health law. It taxes the sale of U.S.-sold medical devices, such as prosthetic joint replacements and heart defibrillators, but excludes consumer products like eyeglasses and thermometers.
According to data from the Advanced Medical Technology Association, 73% of device compan...
