Posted: 12/16/15 19:11
by Dave Mindeman
Rep. Erik Paulsen is playing corporate Santa Claus.
In the budget deal that was just announced there is a provision to suspend the Medical Device Tax for 2 years.
I am still searching for a legitimate reason why this corporate giveaway is needed. Let's take a look at the propaganda...
The U.S. House and Senate are poised to suspend a sales tax on medical devices for two years after intense lobbying on behalf of the medical technology industry that employs tens of thousands of people in Minnesota.
The lobbyists always frame their request in terms that their industry "employs tens of thousands of people in Minnesota". While this is true...is there any evidence that those employees would benefit from this corporate break? I have not seen any yet. I have seen enormous benefits for companies like Medtronic which received a $9 billion windfall for its merger with Covidian. Again, with little evidence that employees benefit.
So what is the benefit?
"This is a significant breakthrough," said Chris Swonger, government relations chief at Plymouth-based Smiths Medical. "This is a move to reinvest in innovation."
The tax package deal already has a research and development tax break in it. I have yet to see where stopping the Medical Device Tax will in any way ramp up more research and development. In fact, these companies have to keep increasing R&D or their business model fails.
Here is another talking point.
It is a tax on gross sales, not profits. Critics, including Klobuchar, argued that it pushed investment in medical technology to other countries
With all due respect, Senator Klobuchar, I would like to see any evidence of that. I mean real hard evidence. If device makers here see a competitive threat, they simply buy them out.
Here is another one....
Device tax opponents also profited from recent analyses by the Congressional Budget Office that the Affordable Care Act (ACA) is going to cost $176 billion less to implement over 10 years than had been expected, Klobuchar said. The downward shifting estimate offered wiggle room in negotiations with the White House.
Would someone please give us a true picture here? Is the ACA bankrupting the economy? or is it saving us money? Everybody seems to have a nice selection of the facts that suit their purposes. I would like to hear Paulsen use that "the ACA is a cost saver" argument in his next pitch.
This provision is just a small part of a huge budget deal, so if it stays in the conference bill, it will probably pass and Obama will sign it, because there are so many layers, it would be impossible to single out any one provision.
So Paulsen can tie this up in a pretty little bow and put it under the Repeal the Device Tax tree and proudly state.....
See donors? You got your money's worth!