Robert Book: The Medical Device Tax: Killing Jobs and Raising Premiums

The 2010 health care law has several new taxes designed to offset its costs. Many of the taxes seem to be narrowly targeted at sick people and the people who help them. There are taxes on prescription drugs, taxes on health insurance, extra taxes on high-benefit health insurance, and reduced tax deductions for people with high medical costs. In the news recently is the excise tax on medical devices, which the House Ways and Means Committeevoted to repeal on May 31.

The medical device tax is a 2.3% excise tax on medical devices sold in the United States, with exclusions for eyeglasses, contact lenses, hearing aids, and devices “generally purchased by the general [sic] public at retail for individual use.” This last exception seems to be intended more to hide the tax from the public than anything else – except maybe to prevent criticism for what would have been a tax on things like Band-Aids and thermometers.

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