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Hagan Urges Delay in Implementation of Medical Device Tax

Tuesday, December 11, 2012

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WASHINGTON, D.C. — U.S. Senator Kay Hagan (NC) joined with Senator Amy Klobuchar (D-MN) in leading a letter with 16 other senators and senators-elect to Senate Majority Leader Harry Reid urging a delay in the implementation of the medical device tax that is scheduled to take effect on January 1, 2013. 

“The medical technology industry directly employs over 400,000 people in the United States and is responsible for a total of two million high-skilled manufacturing jobs.  Additionally, this industry is also one of the few that enjoys a net trade surplus, significantly boosting U.S. exports around the globe,” the letter said. “As we work together to develop a long-term solution to help move our economy forward, reduce our debt and reform our tax code, we urge you to support delaying enactment of this provision in a fiscally responsible manner.” 

“My number one priority is getting North Carolinians back to work, and I am concerned about the effects of the planned medical device tax in North Carolina,” said Hagan. “The medical device industry is critical to North Carolina's dynamic bioscience economy and when the tax was first proposed, I opposed its adoption. Democrats and Republicans must now work together to find a solution that does not harm our economic recovery.” 

“On behalf of the North Carolina business community, I want to express my concern over the threat that the medical device excise tax imposes on this vital sector of our state’s economy,” said Lew Ebert, president and CEO of the North Carolina Chamber.  “We appreciate Senator Hagan bringing this critical issue to the attention of Senate leadership. A study done by AdvaMed shows that the planned implementation of this tax could cost North Carolina hundreds of jobs and an estimated $70 million in annual employment compensation.  This tax will cripple the bottom line of North Carolina companies, many of which may not be able to survive this onslaught of taxation.  Overall, it will jeopardize jobs, the health of patients and the medical device industry, nationwide.” 

According to AdvaMed, North Carolina has 24,500 jobs related directly and indirectly to the medical device industry, and the industry contributes$4.6 billion to the state's economy.  

The full text of the letter is below.

 

The Honorable Harry Reid

Majority Leader

United States Senate

Washington, DC 20510 

Dear Mr. Leader, 

As discussions on the fiscal cliff and our nation’s economic future progress, we write to request a delay in the implementation of the medical device excise tax scheduled to take effect on January 1, 2013. 

The medical technology industry directly employs over 400,000 people in the United States and is responsible for a total of two million high-skilled manufacturing jobs.  Additionally, this industry is also one of the few that enjoys a net trade surplus, significantly boosting U.S. exports around the globe. In an environment focused on increasing exports, promoting small businesses, and growing high-tech manufacturing jobs for the future, we must do all we can to ensure that our country maintains its global leadership position in the medical technology industry and keeps good jobs here at home.  

With this year quickly drawing to a close, the medical device industry has received little guidance about how to comply with the tax—causing significant uncertainty and confusion for businesses. As we work together to develop a long-term solution to help move our economy forward, reduce our debt and reform our tax code, we urge you to support delaying enactment of this provision in a fiscally responsible manner. 

Thank you for your consideration.  We look forward to working with you on this critical issue that will benefit patients, innovators and boost our country’s economic growth. 

Sincerely,

 

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