U.S. Manufacturing Faces Further Headwinds from Return of Medical Device Tax
The Institute for Supply Management’s recently released September purchasing managers’ index – a key gauge of U.S. manufacturing strength – fell to its lowest reading in more than 10 years. The ISM index came in at 47.8% in September, the lowest since June 2009, and the second consecutive month of contraction.
U.S. manufacturing is poised to take an additional hit with the return in January of a $20 billion tax on the medical technology industry, a source of high-paying, high-tech manufacturing jobs where the United States is the undisputed global leader.
“We’ve seen this play out before: the medical device tax means fewer jobs and less economic vitality,” said Scott Whitaker, president and CEO of the Advanced Medical Technology Association (AdvaMed). “When the tax was in place for just three short years, our industry lost nearly 29,000 jobs, not to mention significant reductions in spending on infrastructure and life-saving R&D.
“We can’t allow the economic gains of the last few years to be jeopardized by the return of this onerous tax,” Whitaker added. “A bipartisan majority of Congress understands this tax is bad for jobs and bad for patients. The policy is settled; the process is the problem, and that’s wrong. Congress can address this in the next six weeks. The sooner it does, the quicker American manufacturing can get the shot in the arm it needs to help get back on track and growing again.”
The medical device tax has been suspended since 2016. But there are less than 80 days before it comes back into effect unless Congress acts.