Economics
How Much Will the Medical Device Tax Hurt?
Device makers are fighting a forthcoming excise tax. Maybe they shouldn't
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The trade association for medical device makers such as Abbott Laboratories and Medtronic says a 2.3 percent excise tax on their products designed to help pay for the health-care overhaul will tank sales and push employment overseas. An industry-commissioned study concluded that “under reasonable assumptions,” the tax would cost more than 43,000 U.S. jobs and shave as much as $6.7 billion off annual revenue of $116 billion.
A Bloomberg Government analysis finds the study is not credible. Its assumptions are flawed, in part because it exaggerates the degree to which spending on health is affected by price increases.