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Study: Device Tax Could Threaten Jobs, Innovation BY LAUREN UZDIENSKI, SEPTEMBER 13, 2011

A new study evaluating the 2.3% device industry excise tax quantifies some of the potential harm the tax may cause. Mandated by the Affordable Care Act, the tax is scheduled to go into effect in 2013.

Among the highest stakes are U.S. jobs; the device industry currently provides about 409,000 jobs and $33 billion in payroll. The study, which was published by AdvaMed, states that 43,000 of those jobs and $3.5 billion in payroll are at risk from the tax. Those jobs are likely to be sent overseas.

Innovation is another concern, as early-stage or unprofitable companies that are already financially strained are subject to the same tax as their counterparts with revenues, earnings and commercialized products. U.S. leadership in developing medical technology, already challenged by regulatory and other factors, could suffer.

The authors conclude, " . . . the tax will raise $20 billion in revenues over the period 2013-2019, a cost to device companies and the American consumer. The economic impact of the tax on wages and output will be significantly higher."

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