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GOP Governors Write Letter To Baucus Opposing His Medical Innovation Tax

By Philip Klein on 9.23.09 @ 10:01AM

Five Republican governors have sent a letter to Senate Finance Committee Chairman Max Baucus to voice their opposition to his proposed $40 billion tax on medical device makers arguing that it would kill jobs and stiffle medical innovation.

"We all support health care reform, but special taxes on the companies that bring high-quality, innovative solutions to health care professionals runs counter to the goals of better health care for America," reads the letter, which is signed by, Governors Tim Pawlenty of Minnesota, Mitch Daniels of Indiana, Jim Gibbons of Nevada, Arnold Schwarzenegger of California, and Gary Herbert of Utah.

The tax would raise the price of as many as 80,000 products, according to the letter, including toothbrushes, eyeglasses, artificial heart valves, and diagnostic equipment.

The letter notes that the industry employs 360,000 people in the U.S., but that the tax hike would be the equivelent to a 10 percent to 30 percent income tax surcharge, depending on the business, which would make the U.S. "the highest tax jurisdiction in the world in which to produce medical technology."

Not only would the tax cost jobs, the governors argue, but would increase health care costs.

You can download a PDF of the full letter here.