No, Repealing the "Medical Devices Tax" is Not a Good Idea

Since the Affordable Care Act was signed into law, industry lobbyists, Republicans, and Conservative Democrats have taken aim at the "Medical Devices Tax" in the bill, used to help finance the legislation. They say it's a job killer. It turns out that it's not.

he CRS report reaffirms what we’ve said repeatedly:  the tax, which will raise $26 billionover the next decade to help pay for health reform, has only a very limited economic impact, contrary to industry lobbyists’ dire predictions.

• “The effect on the price of health care,” CRS says, “will most likely be negligible because of the small size of the tax and small share of health care spending attributable to medical devices.”
• “The drop in U.S. output and jobs for medical device producers due to the tax is relatively small, probably no more than 0.2%.”
• “[I]t is unlikely that there will be significant consequences for innovation and for small and mid-sized firms.”
• “The tax should have no effect on production location decisions, since both domestically manufactured and imported medical devices are subject to the excise tax.”

In other words, the tax is not harmful, and those who want to get rid of it should explain how they plan to make up for the $26 billion in lost revenue. This tax isn't costing jobs or productivity, but repealing it just hurts the effectiveness of the Affordable Care Act.