Under Trump, the medical device industry will likely be the first to benefit from tax cuts
Nick Carey and Susan Cornwell, Reuters – December 9, 2016
WARSAW, Indiana/WASHINGTON (Reuters) – When Donald Trump takes over as president on Jan. 20, one of the first business tax breaks he delivers is likely to go to the U.S. medical device industry and companies like Mark Throdahl’s.
The chief executive of OrthoPediatrics Corp, based in northern Indiana, said his company has been able to hire more workers since the temporary suspension effective last January of a federal tax on medical devices. The tax was imposed as part of outgoing President Barack Obama’s signature 2010 healthcare law.
Throdahl said he hopes the incoming Republican-led Congress and president will permanently repeal the tax.
Trump and U.S. lawmakers are likely to do that, according to lawmakers, lobbyists and industry executives, in a step that also would help larger medical device makers such as Medtronic Inc, Boston Scientific, St. Jude Medical Inc and Johnson & Johnson.
Tax cuts are Republican gospel, and Trump’s new Republican administration is widely expected to make them happen.
The medical device tax may be one of the first on the chopping block. It was first imposed in January 2013 as a funding mechanism for the Affordable Care Act, dubbed Obamacare, a law that has brought medical coverage to millions of previously uninsured Americans. But Republicans hate Obamacare and this particular tax has powerful enemies in both parties.
Senate Republican Leader Mitch McConnell said repealing the Affordable Care Act, dubbed Obamacare, will be the first order of business in the Senate when it convenes in January.
Whether cutting taxes, including the one on medical devices, will deliver more jobs remains to be seen. The Congressional Research Service, a nonpartisan arm of Congress, said in January 2015, when the medical device tax was fully in effect, that it was having only “fairly minor” impact on production of devices and employment in the industry.
