24 Apr 2013 Free-Market Group Presents GE CEO Jeffrey Immelt with Proposal to Simultaneously End Harmful Medical Device Tax and Federal Wind Subsidies
Immelt Calls Plan an “Interesting” Idea
New Orleans, LA / Washington, D.C. – Today, at General Electric’s annual meeting of shareholders in New Orleans, Justin Danhof, Esq., director of the National Center for Public Policy Research’s Free Enterprise Project, presented GE CEO Jeffrey Immelt with the National Center’s plan to repeal ObamaCare’s medical device tax while keeping the move financially balanced by simultaneously ending taxpayer subsidies to the wind power industry.
“Mr. Immelt seemed sincerely interested in evaluating our efforts to end both the medical device tax and federal subsidies for wind power,” said Danhof. “Calling the proposal ‘interesting,’ Immelt noted that he had not heard of our specific idea, but seemed to think it merits earnest consideration.”
Embedded in ObamaCare is a 2.3 percent excise tax on medical device manufacturers and suppliers that took effect at the beginning of 2013. According to a report by the Milwaukee Business Journal, this medical device excise tax could cost GE Healthcare Services between $100 million and $150 million annually. This new burden has already been blamed for job losses in the health care industry, and some believe it inevitably will hamper investment in research innovations. Support for repeal of the tax has come from ideologically diverse lawmakers such as Senators Al Franken (D-MN) and Lamar Alexander (R-TN).
The National Center has concluded that repealing the medical device tax while ending the wind production tax credit would lead to a net increase in U.S. jobs. Nearly a fifth of U.S. medical device manufacturers expect to lay off employees because of the medical device tax. Some medical devices companies, such as Stryker, Smith & Nephew and Zimmer Holdings, have already laid off employees as a result of this tax. Meanwhile, a study published in March jointly by the American Energy Alliance and the National Center found that employment benefits of wind subsidies have been grossly overestimated by lobbyists for wind subsidies.
“The medical device industry produces devices that save our lives and improve our health,” explained the paper’s author, David Hogberg. “By contrast, the wind-energy industry produces less than 2% of the nation’s electricity, despite decades of tax credits and government subsidies. Repealing the medical device tax will eliminate a burden on an industry that provides great value for Americans. Eliminating the two-decade old wind-energy production tax credit will not only help replace some of the revenue from the medical device tax, it will end a tax credit for an industry that provides little benefit for the U.S.”
“I am hopeful that Immelt will sincerely consider endorsing our plan, and encouraged that he seems interested in doing so,” said Danhof. “Every day that passes without a repeal of the medical device tax is another day in which the jobs of employees in the medical device industry are lost or at risk.”
A copy of Danhof’s question at the shareholder meeting, as prepared for delivery, can be found here.
The National Center for Public Policy Research is a General Electric shareholder.
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