Lehigh Valley start-ups and small companies that produce medical devices are going to be hit hardest by a health care law that imposes a 2.3 percent excise tax on these businesses.
That's the conclusion Congressman Charlie Dent came to when he spoke about House Bill 436 at the Whitehall Area Chamber of Commerce luncheon at Fellowship Manor in Whitehall. The bill would repeal a 2.3 percent excise tax that the 2010 health law would levy on manufacturers and importers of certain medical devices starting in 2013, according to a document from the House of Representatives website.
“2.3 percent limits your ability to attract financing and growth,” said Dent. “It raises costs; it kills jobs and will stifle innovation.”
Companies that could be impacted by this new tax include larger companies like B. Braun in Bethlehem, but also smaller ones such as Precision Medical Inc. in Northampton, Boas Surgical Inc. in Allentown and BIOMED in Upper Macungie Township, said Dent.
The impact could be so severe, that some of these companies could be forced to close their doors.
“It's literally thousands of jobs,” said Dent. “A lot of these companies are going to go to Europe and elsewhere.”Dent voted to repeal the tax and co-sponsored HB 436.
“Start-ups especially are going to pay for this,” said Dent. “There are enormous implications for the small business sector.”
Dent said the tax could cost businesses $30 billion over the next 10 years.The bill, which passed the House on June 7, is up for Senate vote. Dent said it would probably not happen before the end of the year.