U.S. Senator Max Baucus (D-MT), chairman of the Senate Finance Committee, has put forward a health care reform proposal that includes a $4 billion tax per year on medical device and diagnostic manufacturers based on sales.
According to the Wall Street Journal, the “core of the industry … spent about $9.6 billion on product development in 2007,” and venture capital investment in device makers in 2007 came in at $3.7 billion.
That $4 billion would be a major hit on investment and innovation.
It’s also a tax on small, entrepreneurial firms.
In 2006 (latest Census Bureau data), there were 11,414 medical equipment and supplies manufacturers in the U.S.
Of those firms, 98.3 percent had fewer than 500 employees, and 84.6 percent had fewer than 20 employees.
Make no mistake, the proposed tax on medical device manufacturers is a direct tax on small, innovative businesses.
Raymond J. Keating
Small Business & Entrepreneurship Council