U.S. House votes to repeal medical device tax
Legislation repealing the 2.3-percent federal tax on medical devices cleared the U.S. House Thursday on a vote of 280-140, and an industry leader in Massachusetts predicted the proposal would pass the Senate if it emerges for a vote but face a veto from President Obama.
Members of the Massachusetts delegation were split on the vote, with four voting for repeal and five voting against repeal. Local representatives voting against repeal were Joseph Kennedy, Richard Neal, James McGovern and Niki Tsongas. Voting for repeal was Katherine Clark.
Supporters of the tax say it provides critical funding for the Affordable Care Act (ACA) and predict its repeal will add to the federal deficit. They also argue the medical device industry, which has a strong presence in Massachusetts, has been a major beneficiary of insurance coverage expansion under the ACA.
Critics argue the tax stifles innovation and suppresses job creation while encouraging the medical device industry to grow outside, rather than inside, the U.S.
Tom Sommer, president of the Massachusetts Medical Device Industry Council, said the industry in Massachusetts has lost about 1,000 jobs but still accounts for 23,000 workers at 480 companies.
Since the tax was implemented in 2013, Sommer said companies here have dealt with compliance costs, reduced spending on research and development, moved manufacturing operations offshore and postponed expansion plans.
Sommer said the medical device industry accounts for 19 percent of exports in Massachusetts.
Asked about the prospects for repeal, Sommer said "this will pass in the Senate" and likely face a veto from President Obama.
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