Policy Documents

Employment Effects of the New Excise Tax on the Medical Device Industry

Diana Furchtgott-Roth and Harold Furchtgott-Roth –
September 1, 2011

One provision of the new healthcare law is a 2.3% excise tax on the medical deviceindustry which will take effect in 2013. This study estimates the potential effect of thedevice tax on employment in the medical device industry. The study finds that the taxcould reduce employment in the industry by cutting back on the demand for medicaldevices and by encouraging American firms to shift production overseas.