In my article
the other day on the Baucus health care bill, I noted the new
taxes he has proposed in order to pay for it. Today, a Wall
Street Journal
editorial took a close look on one of those taxes -- a $4
billion per year levy on medical device makers. The editorial
highlights how damaging it would prove to an important industry:
This new tax will eventually be passed through to patients,
increasing health-care costs. It will also harm innovation,
taking a big bite out of the research and development that
leads to medical advancements. The core of the industry
(excluding a few conglomerates like Johnson & Johnson)
spent about $9.6 billion on product development in 2007,
according to Ernst and Young. The Baucus tax is nearly half
that, and also exceeds $3.7 billion, the total venture capital
invested in device makers that same year.
John Kerry, representing a state with a large medical device
industry, has expressed
concern about the measure.
