Why Elizabeth Warren Wants to Repeal Part of Obamacare

Sep 10, 2012 12:32pm

U.S. Senate candidate Elizabeth Warren is a superstar within the Democratic Party and a lightning rod for Republican outrage over the issue of tax fairness.  But there is one tax that Warren doesn’t like and it’s part of Obamacare.

The 2.3 percent excise tax on medical devices is a little-known provision in the law that is estimated to raise $20 billion in revenue over 10 years, according to the Joint Committee on Taxation.

But some Democrats, including Warren, a Democratic National Convention speaker, represent states that employ medical device workers and are concerned that the tax with hamper job growth in industry valued at over $100 billion in 2010, according to the Department of Commerce.

Warren’s campaign declined to comment for this story but points to an op-ed written by Warren for a local Massachusetts trade magazine, where she comes out strongly against the tax.  The campaign, when asked, also declined to present a plan to replace the $20 billion in estimated revenue.

“Three changes in government policy are essential: a more efficient regulatory system at the FDA, repeal of the medical device tax, and an increased national commitment to research and education,” said Warren.

Products that are categorized as medical devices include: breast implants, stents used to unclog arteries and heart defibrillators.  Medical devices are a key part of Massachusetts health care driven economy.   The industry supports over 80,000 jobs in Massachusetts, a 2011 Deloitte study found.

“She is looking to represent a constituency that has a high concentration of medical device companies with medical device employees, so I think it’s appropriate for her to be focused on issues important to that constituency,” said J.C. Scott, director of government affairs at AdvaMed, a medical device trade group.

Industry-funded studies warn that the tax could lead to potential job losses in the medical device field, but critics argue that studies that show job losses are funded by industry groups and are therefore not credible.

“The argument about the medical device tax affecting jobs is greatly overblown,” said Paul N. Van de Water, a senior fellow at the Center on Budget and Policy Priorities.  ”It’s just not big enough to have substantial adverse effect.”

The new device tax takes effect on Jan. 1, 2013 but industry advocates are working to repeal it before that happens.

“We think that there will have to be some sort of legislative package by the end of the year to address the numerous fiscal issues and if that presents an opportunity to move something,” said Scott.

The other democratic Senators who have expressed concern with the tax are Sen. John Kerry, D-Mass., and Sen. Al Franken, D-Minn.

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