Tracking tax reform continues to be a high priority for AdvaMed as evidenced by its response to President Obama's framework for business tax reform. The framework proposes lowering corporate tax rates and paying for that by closing various corporate tax loopholes.
In a prepared press release, AdvaMed President and CEO Stephen Ubl referred to the president's framework as “a welcome step in the effort to make the American corporate tax system more competitive. We particularly welcome the president's emphasis on creating a level playing field for advanced manufacturing and on supporting research and development.
Ubl went on to represent industry concerns over the $20 billion medical device tax (2.3% levy). “A key element of any tax reform must be repeal of the onerous medical device tax that is scheduled to go into effect next year,” Ubl stated. “This tax will dramatically raise our industry's already uncompetitive tax rates and is already resulting in layoffs and reduced investments in the next generation of treatments and cures. No serious tax reform effort aimed at enhancing American competitiveness can ignore the importance of repealing this tax—and we call on the president and Congress to include repeal of this job-killing measure in any tax legislation.”
Other AdvaMed concerns involve a proposed minimum tax on foreign earnings, which Ubl “described as a blunt approach that would still leave the US an outlier among competitor nations and make US multinational corporations less competitive.”
He went on to commend the enhanced research and development tax credit, but cautioned that it would still leave the US with a less competitive credit than many other nations. “For medical technology companies, Ubl observed, “effective tax rates for activities located abroad are much lower than the effective tax rates for activities located in the US, and it is not clear whether the president's proposals will close that gap enough to make us truly competitive.
Ubl concluded his statement by praising the president's framework for tax reform as an important starting place, and not an ending place. In the days ahead, AdvaMed will undoubtedly be reminding legislators of the two million Americans directly and indirectly employed by medtech and of AdvaMed's recently announced tax reform principles.