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AdvaMed Statement on JEC Small Business Tax Hearing
WASHINGTON, D.C. – Ashley Wittorf, executive director of AdvaMed Accel, a division of the Advanced Medical Technology Association (AdvaMed) focused on issues of concern to smaller medical technology companies, released the following statement on today’s hearing of the Joint Economic Committee, entitled “Small Business, Big Taxes: Are Taxes Holding Back Small Business Growth?”:
“AdvaMed Accel commends Sen. Dan Coats (R-Ind.) and the other members of the committee for holding this important hearing on how America’s tax policies are burdening smaller companies.
“For the start-up and small businesses that are vital to the medtech industry, access to capital in the pre-profit stage is crucial, and the industry is currently experiencing low levels not seen since 1995. The decline in venture capital investment has a number of causes that need to be addressed, but more tailored tax incentives for small and emerging medical technology firms can help lay the foundation for long-term growth in the development of new treatments and cures, and the continuation of a vibrant, healthy and competitive industry.
“The medical device tax is a perfect example of how misguided tax policies are stifling growth and innovation in one of the country’s most dynamic industries. The burden imposed by this tax, on top of the already high corporate tax rate, impacts the entire innovation ecosystem, as resources in large firms that could fuel investment in new companies – as well as funds for large and small firms to invest in new products, research and capital improvements – are reduced.
“In addition to repeal of the medical device tax, we support efforts to make the research and development tax credit permanent and to relax the passive activity loss (PAL) limitations for R&D-focused pass-through entities, as R&D is such a critical element to growth and innovation in the medtech sector. Finally, we also advocate for changes to the tax code that would increase the amount small businesses would be allowed to immediately deduct for investments in property, equipment and computer software. This is especially important for smaller companies that may experience cash-flow problems.
“There is strong bipartisan support in both houses of Congress to reform the tax code, which is an essential ingredient for our industry’s long-term competitiveness. Repeal of the medical device excise tax would be a crucial first step toward reform that would eliminate a particularly onerous drag on industry growth. We look forward to working with members of Congress, the administration and other stakeholders on enacting changes to the tax code that will spur growth and innovation in the medical technology industry and the broader American economy.”
AdvaMed Accel is the division within AdvaMed dedicated to addressing the unique needs and challenges of smaller medical device and diagnostics manufacturers – the lifeblood of the medical technology industry. The only organization of its kind focusing specifically on the needs of the medtech industry’s emerging growth companies, AdvaMed Accel works to create a policy environment more conducive to capital formation and innovation.