A proposed tax on medical devices has the medical tech industry upset. The GOP will attempt to block the tax, striking a blow to Obama’s healthcare reform. Would the tax really hurt the medical device businesses?
Democrats believe that the medical technology industry should pay taxes on products sold in the U.S. A mere 2.3 percent tax is set to take effect in January. The tax is part of Obama’s healthcare overhaul. The reform will gain the entire medical industry millions of new clients by expanding health insurance.
However, Republicans think that the tax will stifle medical innovation. They will attempt to repeal the tax with legislation in the House. Whatever legislation they come up with, though, will certainly stall in the Democratic Senate.
The tax could be bad news for companies like Quality Med Inc. in Tucker, GA. This respectable company buys and sells medical supplies. Coping with taxes on their merchandise could damage their ability to provide affordable medical devices.
Democrats allege that this is just a ploy to dismantle Obamacare. However, some Democrats do support the Protect Medical Innovation Act. Prominent Democratic senators such as Al Franken want to eliminate the tax. Others come from states with large medical industries such as Pennsylvania and Massachusetts.
It is widely believed that the overall effect of the tax will be minimal. With new customers drawn in by healthcare reform, the medical industry will easily afford the modest tax. Claims that the tax will encourage outsourcing are baseless. Since the tax applies to all U.S. sales, outsourcing would not mitigate it.
However, smaller businesses are likely to be hurt. The 2.3 percent tax applies to total sales, not profits. Say a company sells $100 million worth of devices for a $4 million profit. They would owe $2.3 million, over half their profit. In addition, they would still pay state and federal taxes.
The effect of the tax on the medical device industry remains unclear. What remains certain is companies like Quality Med, Inc. from Tucker, GA will have to adjust. Many think the new customers paying for devices due to healthcare reform will cover the difference. However, the medical technology industry is understandably nervous.
Quality Med, Inc. Tucker, GA is a medical supplies company. They buy and sell medical devices online. Quality Med, Inc. consistently receives high ratings from the BBB and its customers. The company is proud to ensure high-quality supplies and hassle-free buying.