Medical-device companies scored a political victory when the Senate voted in a non-binding resolution to repeal a new device tax, and now they are turning their attention to the House, especially U.S. Representative Ed Markey.
The 2.3 percent tax went into effect in January and is supposed to help offset the costs of implementing President Obama’s landmark health reform law. But the device industry argues that it would cost Massachusetts’ largest companies more than $411 million a year, according to a new analysis by the Pioneer Institute that will be released in April, just before the first payment is due.
The Senate voted 79-20 to repeal the tax Thursday evening in a bipartisan budget amendment in a non-binding resolution. Massachusetts Senators Elizabeth Warren and William “Mo” Cowan signed on to the repeal, following a flurry of last-minute lobbying from Massachusetts medical device makers of New England Democrats.
Rep. Markey voted against repeal of the tax last year, but says he opposes the tax on principle. The problem? Keeping Obamacare funded:
Markey says he has not signed onto the current bill because it does not specify how the repeal would be paid for.
“I am concerned about the impact that the device tax could have on the medical device industry and job creation in Massachusetts,” Markey said. “I opposed the inclusion of this tax in the House health care reform bill. I would support repealing the tax, as long as the revenue replacing it does not impact middle-class families or their health care benefits.”
With clear bipartisan support for repeal, there’s a good chance the tax will be overturned. However, two top Democrats – Senate Majority Leader Harry Reid (D-NV) and Senate Finance Committee Chairman Max Baucus (D-MT) voted against repeal, which means a fight may still be ahead. On the other hand, the 1099 tax in Obamacare was overturned some time ago, giving precedence to elimination of a tax created in the health care law.
Given that the Senate amendment is non-binding, it has no force of law. But it is a good sign that an overwhelming majority of the Senate is expressing an opinion against this tax, which means legislation has a good chance of passing in the future.