Industry lobbies to repeal new U.S. medical-device tax
Smaller medical-device companies already spend a great deal on overhead and research and development costs that result in profit margins in the single digits, said Mike Handley, president of the Northern Colorado Bioscience Cluster.
“It will … hurt small- and mid-sized companies,” Handley said. “Clearly, they can’t absorb the cost like large companies can.”
The tax on medical devices is part of President Obama’s Affordable Care Act, which passed by Congress in March 2010. It’s supposed to raise nearly $30 billion in the next decade to fund health care reform.
The U.S. House voted 270-146 this month to repeal the tax as part of the Health Care Cost Reduction Act of 2012, with 37 Democrats joining 233 Republicans. However, the bill has little hope of success in the Democratic-controlled U.S. Senate, and Obama has threatened to veto the measure.
The Affordable Care Act would tax gross sales receipts of more than $5 million for manufacturers and
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