October 16, 2013

In the Midst of the Shutdown, Here’s a Win on Corporate Taxes

By Frank Clemente, Campaign Manager, Americans for Tax Fairness

As a part of the deal to end the government shutdown, Republican leaders in Congress tried to give a $29 billion tax break to one of the industries that stands to gain the most from health care reform – medical device makers. But for now, it looks like they have failed. The newest deal on the table does not include the repeal.

On Tuesday, Americans for Tax Fairness and 115 other organizations across the country joined together to oppose the repeal of the Medical Device Tax in a letter to Congress. The tax helps to fund the Affordable Care Act, and it will be paid mostly by large and profitable companies like GE and Johnson & Johnson that dominate the nearly $130 billion U.S. medical device market. In short: it’s worth preserving.

These companies claim that the tax is unfair and a burden on jobs and growth. But their arguments have been debunked time and time again.

Here are some of the points made in our letter:

• There is NO evidence that this tax will cost Americans jobs. A major industry study that claimed this has even been debunked by pro-business Bloomberg.com.

• This tax does NOT create any incentives for companies to move jobs offshore, because it applies to all medical devices sold in the United States regardless of where they’re made.

• Consumers will NOT pay more, healthcare costs will NOT rise, and device demand will NOT fall due to this tax. Any rises in health care cost will be minimal, and the newly insured customers from the Affordable Care Act will benefit these companies handsomely.

• This tax largely affects only the most profitable medical device firms. Thirty medical device makers accounted for 85 percent of U.S. company sales of $128 billion in 2012.

While this tax is off the table for now, odds are good that it will rear its ugly head again. There’s a large and well-organized lobby pushing for it – in Washington and in numerous states. We can’t let them take much-needed healthcare from middle class and working Americans in order to give another tax break to big corporations. And this should never have been a demand in negotiations to end the government shutdown. That’s outrageous! For now, let’s celebrate that some tax-dodging companies are going to pay a small tax that will bring them a little closer to paying their fair share of taxes.