[Congressional Record Volume 163, Number 127 (Thursday, July 27, 2017)]
[Senate]
[Page S4456]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 431. Mr. LANKFORD submitted an amendment intended to be proposed 
to amendment SA 267 proposed by Mr. McConnell to the bill H.R. 1628, to 
provide for reconciliation pursuant to title II of the concurrent 
resolution on the budget for fiscal year 2017; which was ordered to lie 
on the table; as follows:

       At the appropriate place, insert the following:

     SEC. ___. FINDINGS; SENSE OF THE SENATE.

       (a) Findings.--The Senate finds that--
       (1) Since January 1, 2013, medical device manufacturers 
     have struggled under a 2.3 percent tax imposed by Obamacare 
     on the sale of certain medical devices. The misguided purpose 
     of that tax was to operate like an excise tax by raising 
     revenue at the point of sale to offset the cost of 
     Obamacare's insurance and Medicaid expansions by taxing 
     companies who help patients get access to life-saving medical 
     technologies.
       (2) The tax was in effect from 2010 through 2015, but the 
     Consolidated Appropriations Act, 2016 (Public Law 114-113) 
     temporarily suspended the tax for 2016 and 2017. The tax is 
     now set to resume in 2018.
       (3) Initially expected to produce $3,200,000,000, 
     supporters of the device tax argue that it would be similar 
     to the windfall profits tax from the 1980s, and recapture the 
     excess gains that medical device manufacturers are expected 
     to receive from the Patient Protection and Affordable Care 
     Act.
       (4) Taxable medical devices are defined by law as any 
     device ``intended for use in the diagnosis of disease or 
     other conditions, or in the cure, mitigation, treatment, or 
     prevention of disease in man or other animals . . . or 
     intended to affect the structure or function of the body of 
     man.'' Based on this definition, the tax would be levied on 
     critical devices such as pacemakers and defibrillators.
       (5) Since its enactment, the medical device tax has been a 
     major drag on medical innovation and contributed to the loss 
     or deferred creation of jobs, reduced research and 
     development, and slowed capital expansion. What is even more 
     troubling is that this tax was imposed without any real 
     policy justification, as the tax is not grounded in any 
     health care policy. As it stands under current law, it is not 
     connected to individual insurance coverage under Obamacare - 
     it was designed purely as a means of raising revenue from the 
     industry to offset the budgetary impact of the Patient 
     Protection and Affordable Care Act.
       (6) At its most basic level, this tax violates commonly 
     accepted principles of sound tax policy. In a 2015 report, 
     the Congressional Research Service paid close attention to 
     excise taxes in particular, stating that, ``Viewed from the 
     perspective of traditional economic and tax theory. . .the 
     tax is challenging to justify. In general, tax policy is 
     considered more efficient when differential excise taxes are 
     not imposed. It is generally more efficient to raise revenue 
     from a broad tax base.''.
       (7) The effects of the tax are felt across the industry, as 
     every dollar of revenue (not income or profit) earned by a 
     company is generally subject to the tax. For larger, 
     established companies, the device tax represents millions in 
     financial capital that could be used to expand research and 
     create jobs. For smaller, start-up firms, the effect is much 
     worse - not only does it deter company growth, since the tax 
     is imposed on the first dollar of revenue earned, but it also 
     restricts the ability of established medical technology 
     companies to invest in or acquire start-up companies by 
     limiting the amount of available capital for growth.
       (8) Individual companies are already making important 
     planning decisions for the next fiscal year. Companies are 
     already making significant commitments of time and resources 
     to enable or restart their systems to accurately capture, 
     report, and pay the tax if it goes back into effect at the 
     end of the year. The longer Congress waits to act, the more 
     capital device companies will waste that could go towards 
     major medical breakthroughs to help patients, and more 
     broadly towards advancing the state of our nation's medical 
     technology.
       (9) Permanently repealing the device tax will provide 
     medical technology innovators with the long-term certainty 
     necessary to support future job growth and sustainable, 
     research and development that will ultimately lead to the 
     next generation of breakthroughs in patient care and 
     treatment. With any other policy outcome, effective planning 
     for a sustainable future becomes much more difficult.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that the committee of jurisdiction in the Senate should 
     conduct a full review and assessment of the economic impact 
     of the medical device tax since its inception under the 
     Patient Protection and Affordable Care Act. Such review and 
     assessment should include consideration of the impact of the 
     tax on job creation, capital formation, research and 
     development, and medical technology innovation.
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