NEWS-SENTINEL EDITORIAL: Not everyone is getting a tax decrease
In spite of the Republicans’ sweeping tax overhaul in 2017 that will give a tax cut this year to Indiana corporations, the medical-device industry will see the resumption of a big tax increase that we believe should be eliminated altogether.
When the increase was written into the Affordable Health Care Act to take effect in 2013, medical device manufacturers were alarmed at the measure and the expected hardship on their businesses. The tax is levied on devices sold to health care providers.
Some 155 Indiana companies which employ 17,000 Hoosiers to make thousands of medical devices, from pacemakers, stents and catheters to MRI machines and artificial joints, will begin paying a 2.3 percent federal excise tax beginning this month, following a two-year moratorium that expired Dec. 31.
That is, unless our national lawmakers do something about it pronto, which we believe they should.
Indiana senators Todd Young, Republican, and Joe Donnelly, Democrat, both favor a suspension or outright repeal of the medical-device tax. So do many of Indiana’s House delegation, including Jim Banks, R-3rd District.
“The medical device industry is extremely important to northeast Indiana, and I strongly support a permanent repeal of the medical device tax,” Banks said in a statement last November. “This tax hurts consumers, restricts innovation and jeopardizes Hoosier jobs.”
After the medical device tax took effect in 2013, Congress passed a spending package in 2015 that suspended the tax for a two-year period that expired on the last day of 2017.
In a last-minute bid, U.S. Rep. Jackie Walorski, R-2nd District, introduced a bill in late December to continue the suspension for another five years. It has yet to come up for a vote.
“It’s not as good as just killing it off, which was the original hope, but it’s a step in the right direction,” George M. Telthorst, director of the Center for the Business of Life Sciences at the Indiana University Kelley School of Business in Bloomington, told The Republic for a story on Saturday.
The Republic said Indiana companies such as Cook Medical of Bloomington and Zimmer Biomet of Warsaw could end up paying millions of dollars a year because of the tax.
Indiana Public Media reported Monday that companies are advocating for the repeal of the tax, which is to be included in Congress’ government-funding bill that must be passed by Friday to avert a government shutdown.
Congress needs to pass the bill and repeal the tax.