Republican lawmakers met with medical device makers in Philadelphia Monday to show their support for repealing a new tax on the industry.
A report just released by the Advanced Medical Technology Association says a $3 billion added cost to the sector– the projected impact of a 2.3 percent tax on revenues for medical device makers — would cost Pennsylvania more than 1,700 jobs and $346 million in economic output over seven years.
David Nexon, with the association, said the tax and other regulatory hurdles have the potential to drive business overseas and stifle innovation.
“Medical technology has a bright future, but the critical question is whether that future is going to be made in America or made somewhere else,” Nexon said in remarks to lawmakers and industry representatives at an event at the University City Science Center.
The tax is set to go into effect in 2013 and will raise $20 billion in 10 years to help finance provisions of the Affordable Care Act.
U.S. Rep. Jim Gerlach of Pennsylvania said that, because of its structure, the tax on revenues would hit small startups, which may not be turning a profit, especially hard.
“It’s a tax right off the top, right off the initial gross revenues of a company,” Gerlach said. “We think it really needs to be repealed as soon as possible.”
Last year Gerlach introduced a bill to do just that.
Supporters of the tax say the additional cost will be offset by the millions more consumers who will be insured under the federal health-care law.