Excise Tax on Medical Devices Should Not Be Repealed

The House may soon vote on a measure to repeal the 2.3-percent excise tax on medical devices that policymakers enacted in 2010 to help pay for health reform. The excise tax is sound, however, and the arguments against the tax don't withstand scrutiny. Repealing the excise tax would cost $26 bil...

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Bibliographic Details
Published in:Policy File 2015
Main Author: Van de Water, Paul N
Format: Report
Language:English
Subjects:
Center on Budget and Policy Priorities
Taxation
Online Access:Request full text
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Summary:The House may soon vote on a measure to repeal the 2.3-percent excise tax on medical devices that policymakers enacted in 2010 to help pay for health reform. The excise tax is sound, however, and the arguments against the tax don't withstand scrutiny. Repealing the excise tax would cost $26 billion over the 2015-2024 period. Pay-as-you-go procedures would require Congress to offset the cost of repeal by increasing other taxes or reducing spending, but Congress seems likely to ignore those rules and simply add to the deficit if it proceeds with repeal. Moreover, repealing the tax would encourage efforts to repeal other revenue-raising provisions of health reform, as well, which would either require more painful offsets or further increase the deficit if Congress failed to offset the cost. The industry's lobbying campaign against the medical device tax is based on misinformation and exaggeration, as a number of industry executives and analysts confirm.