Full disclosure. I am a consultant and investor in two medical device companies. I could not care less about the medical device tax. It has no impact on anything. Each company has breakthrough devices that improve outcomes for patients and lower the costs of treatment. THAT is what counts, and will drive success and profits of the enterprises.
Nonetheless, there appears to be a movement afoot to repeal the medical device tax. That adds to our debt.
It is also not imperative to tax on devices to raise the $29 billion over a decade to help fund the Affordable Care Act. The tax was imposed so that the device industry, like hospitals and pharmaceuticals, contributed something to the Affordable Care Act in exchange for the prospects of more customers.
But, if everyone is all aflutter about ending that tax, we will have to make up the lost revenues.
Why not end oil subsidies?
From 2013-2022 ending those subsidies would offset the loss of revenues on medical devices. To be more precise, repealing two-thirds of the subsidies would do.
The president, of course, is correct that such a deal should not be discussed with a gun to the head of the American people. The American people, the American president, does not negotiate with hostage takers, foreign or domestic. Recall how horrified the country was when it was discovered that President Reagan had traded arms-for-hostages with Iran.
But, when (if!), rational discourse again prevails, the medical device tax repeal paid for by cutting subsidies to the oil-and-gas industry would be a good deal.
Trade a small tax on products for human health for subsidies to the most profitable industry in history that is also polluting our air and water and not paying for it.