knives out for Obama's medical devices tax
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[November 13, 2014]
By Kevin Drawbaugh
WASHINGTON (Reuters) - Republicans in the
U.S. Congress will soon move to kill a medical device tax imposed less
than two years ago under President Barack Obama's healthcare law,
congressional aides and analysts said on Wednesday.
The 2.3-percent excise tax on sales of most medical devices sold
in the United States helps fund the law, known as Obamacare, and
applies to products ranging from bedpans to heart pacemakers. It
took effect in January 2013 and is projected to raise about $30
billion a year in government revenue over 10 years.
Though no full-scale repeal of Obamacare is expected, even with the
Senate now under Republican control, the move against the tax is
part of efforts to gradually chip away at the law.
Last week's elections will elevate Republican Senator Orrin Hatch, a
long-standing opponent of the tax, to the chairmanship of the
tax-writing finance committee in the Senate.
"The senator will continue to examine and support every viable
opportunity to permanently repeal Obamacare’s onerous tax on medical
devices," said his spokeswoman Julia Lawless.
The Senate in March 2013 approved a symbolic resolution calling for
repeal of the tax, with more than 30 Democrats joining Republicans
in support of the non-binding measure.
Opposition to the tax is also widespread in the House of
Representatives, so there is a strong chance it could be repealed.
Republicans held the majority there even before the elections and
voted on 50 occasions to repeal all or part of Obamacare.
Should the tax be scrapped, it would represent a loss of under 3
percent of the funding Obamacare is expected to need over the next
ten years, which is estimated at over $1 trillion.
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"Repeal of the medical device tax has once again become a rallying
cry for the Republicans ... and now they have the congressional
majority to potentially do something about it," said analysts at
BernsteinResearch in a client note.
The tax has been projected . Medical device companies have lobbyied
against it on Capitol Hill.
Repeal could boost their profits by 1 to 5 percent a year, the
Bernstein analysts said, naming possible beneficiaries as Medtronic
Inc <MDT.N>, Johnson & Johnson <JNJ.N>, Abbott Laboratories <ABT.N>,
Baxter International <BAX.N>, St. Jude Medical Inc <STJ.N> and
Stryker Corp <SYK.N>.
(Editing by Andrew Hay)
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