{"database": "press", "table": "releases", "rows": [["https://paulsen.house.gov/index.cfm?sectionid=105&itemid=1359", "MinnPost: Tax unites medical device industry and Minnesota's lawmakers", "2013-10-22", "2013", "2013-10", "Republican", "House", "MN", "Erik Paulsen", "P000594", "paulsen.house.gov", null, null, "legacy", "Tax unites medical device industry and Minnesota's lawmakers\r\n\r\n\t\u00a0\r\n\r\n\tBy Devin Henry | 10:00 am\r\n\r\n\t\u00a0\r\n\r\n\tWASHINGTON \u2014\u00a0For about six hours last Tuesday, it looked like House Republicans would take another stab at Minnesota Rep. Erik Paulsen\u2019s top legislative priority: repealing or delaying the tax on medical device sales under President Obama\u2019s health-care law.\r\n\r\n\tTheir effort petered out that night, and Republicans would eventually accept a short-term government funding bill with hardly any GOP demands included. But Paulsen and tax repeal advocates say they see an opening, and, more importantly, momentum for repealing the 2.3 percent tax that is expected to bring in $30 billion to fund Obamacare over the next 10 years.\r\n\r\n\t\u201cSo many people are aware of it because it\u2019s been in the news so often, it\u2019s going to be right there again when we\u2019re talking about the budget issues again in two and a half months,\u201d Paulsen said.\r\n\r\n\tDevice industry groups say the tax, which has brought in about $2 billion in new revenue so far this year, is stifling innovation and growth across the board. Tax supporters have dismissed the concerns, at least for large companies like Medtronic, while admitting the tax \u2014 levied on profits as opposed to revenue \u2014\u00a0might be squeezing small device companies.\r\n\r\n\t\u201cThe 10 largest manufacturers have 86 percent of the sales covered by the tax,\u201d said Topher Spiro, an analyst for the liberal Center for American Progress and a former congressional staffer who helped write the Affordable Care Act. He dismissed full repeal efforts, but said, \u201cI think the tax could be even better targeted than it is. The big guys can definitely afford it.\u201d\r\n\r\n\tLawmakers' focus has been either a full repeal \u2014\u00a0Paulsen\u2019s preference \u2014\u00a0or a delay of the tax, which Republican leadership pursued in the final stages of the shutdown fight.\r\n\r\n\tThough that effort failed, repeal supporters say congressional support is growing. Paulsen\u2019s bill has 266 co-sponsors \u2014\u00a0more than half the House \u2014 and Democratic Sen. Amy Klobuchar, who is helping guide the bill through the Senate and at one point pitched it as a shutdown solution, said she\u2019s persuaded a handful of Senate Democrats to sign on to the effort. More than 30 Democrats \u2014 all of them Obamacare supporters \u2014 voted for a non-binding repeal bill in March.\r\n\r\n\tPaulsen, Klobuchar and repeal supporter Sen. Al Franken all said the proposal could move forward either in budget negotiations over the winter or in a broader tax reform effort next year, assuming lawmakers can agree to both one of those larger packages and a way to offset the revenue lost by ending the tax (which is certainly not guaranteed).\r\n\r\n\t\u201cWe\u2019ve gained so much momentum to either have it now or have it in the larger budget discussions, which we want to have at the end of the year or in January,\u201d Klobuchar said last week. \u201cI think there is a lot of positive development on that front, no matter what bill it\u2019s on.\u201d\r\n\r\n\t'Plain vanilla constituent service'\r\n\r\n\t\u00a0\r\n\r\n\tShaye Mandle, the CEO of Minnesota-based tech group LifeScience Alley, said there is a two-fold lobbying effort underway to get the tax off the books: National groups lobby leadership and connected lawmakers in D.C. while groups based in states with a heavy tech prescience \u2014\u00a0Minnesota, Massachusetts, etc. \u2014\u00a0focus on their delegations. Their efforts have won support from interesting sources: a handful of liberals like Massachusetts Sen. Elizabeth Warren have supported repealing the tax, as does the entire Minnesota House delegation, Twin Cities Democrats and all.\r\n\r\n\tConsidering the size of the device industry in many of these Democrats\u2019 states, it\u2019s not that surprising they\u2019re backing repeal, University of Minnesota political science professor Larry Jacobs said. He called it \u201cplain vanilla constituent service\u201d for a lawmaker to back an industry\u2019s priorities when that industry is so influential in their state.\r\n\r\n\t\u201cFor Klobuchar or Franken, you\u2019d be surprised if they weren\u2019t fighting to protect one of the major industries in Minnesota,\" he said. \"In a sense, that\u2019s their job.\u201d\r\n\r\n\tThe industry spreads its cash around as well, and Minnesotans benefit: Paulsen received the most House contributions from the medical supplies industry last cycle, $113,000. Klobuchar ($90,000) was third among senators last cycle and Franken ($12,950) is the industry\u2019s second-favorite senator so far this year.\r\n\r\n\tPaulsen dismissed the donations in a Politico article last week, saying, \u201cThis is about saving lives; it\u2019s about helping patients.\u201d Jacobs said the industry\u2019s tactics have been about par for the course.\r\n\r\n\t\u201cI think it\u2019s the usual bag of tricks: it\u2019s campaign contributions, it\u2019s lobbying, the med tech industry spends a lot of time with Minnesota\u2019s senators,\u201d he said. \u201cJust substitute whatever the favored state industry is and you\u2019d see the same dynamic playing out in every state.\u201d\r\n\r\n\tIdea behind the tax\r\n\r\n\t\u00a0\r\n\r\n\tThe basic idea behind the device tax \u2014\u00a0as well as those on pharmaceutical companies, hospitals and insurance companies as a whole \u2014\u00a0is that the Affordable Care Act would grow the pool of potential device users so much to warrant a new tax to help fund the law.\r\n\r\n\tCompanies and lobbying groups say they haven\u2019t seen that higher demand yet, though they\u2019ve had to pay the tax for more than 10 months. They argue the ACA is unlikely to grow a new base of device users at all \u2014\u00a0many who need the products are older and already covered by some type of health insurance.\r\n\r\n\tBut tax supporters say business should pick up once the bulk of the law, including the individual insurance-coverage mandate, kicks in down the road. They point to a much-cited Wall Street report that predicts the device industry will eventually recoup all of the tax\u2019s expenses through increased demand for its products.\r\n\r\n\t\u201cYou should start to see it this year once coverage gains steam,\u201d Spiro said. \u201cEnrollment this year isn\u2019t going to be full projected enrollment under the law. Device manufacturers can expect revenue to slowly increase.\u201d\r\n\r\n\tIndustry lobbying groups say there\u2019s already a pressing need to repeal the tax, warning it\u2019s hurt venture capital investment in medical technology and led to stagnant company growth and, in some cases, layoffs \u2014 Paulsen said there have been as many as 10,000 so far.\r\n\r\n\tMandle said big companies are shedding their research and development budgets and cutting positions while small companies have been unable to grow their businesses.\r\n\r\n\tMinnesota impact\r\n\r\n\t\u00a0\r\n\r\n\tIn Minnesota, med tech giants say they\u2019ve already factored the tax into their business expenses. Medtronic told the Star Tribune it will pay up to $120 million because of the tax next fiscal year, on profits of $16.6 billion. St. Jude, which saw $5.6 billion in revenue last fiscal year, will pay up to $60 million.\r\n\r\n\tA handful of smaller Minnesota companies say the tax is mostly delaying hiring. That\u2019s the case for Clarus Medical, whose CFO, Randy Gatzke, said the tax is essentially a worthless expense for his company \u2014\u00a0he compared it to an employee who shows up and punches his time card, but who just sits around and refuses to work all day. The company tried to pass on the cost as a new line-item charge to its customers, but \u201cthe longer the year went on the less tolerant they became of it,\u201d he said. \u201cWe\u2019ve been eating that for a number of months here.\u201d\r\n\r\n\tJennifer Ness said her company, Medsource, a 20-person outfit in Mound, is looking to expand its product development department, but it, too, has had to cover the cost since its customers won\u2019t pay.\r\n\r\n\tShe also questioned whether Medsource would see any of the new device business promised by the law.\r\n\r\n\t\u201cMost of our products are for emergency medical services,\u201d she said. \u201cEmergencies aren\u2019t going to increase just because everyone has health insurance.\u201d\r\n\r\n\tJoseph Shultz, the vice president of Nascent Surgical, said his company has struggled to attract new investors and said the tax may be pushing technology businesses out of the country (tax supporters say this fear is overblown, since the tax applies to the sale of all devices in the United States, foreign-made or otherwise). When foreign business groups have tried convincing Schultz and others to move off-shore, \u201cit\u2019s been pretty convincing,\u201d he said. \u201cI think if I were to start this thing again, I don\u2019t think it would be in Minnesota.\u201d\r\n\r\n\tRead the entire piece online here.\r\n\r\n\t###", 1, "2026-03-30T12:14:52Z", "2026-03-30T12:14:52Z"]], "columns": ["url", "title", "date", "year", "month", "party", "chamber", "state", "member_name", "bioguide_id", "domain", "scraper", "source", "date_source", "text", "has_text", "collected_at", "updated_at"], "primary_keys": ["url"], "primary_key_values": ["https://paulsen.house.gov/index.cfm?sectionid=105&itemid=1359"], "units": {}, "query_ms": 0.8569573983550072, "source": "dwillis/congress-press", "source_url": "https://github.com/dwillis/congress-press", "license": "MIT", "license_url": "https://github.com/dwillis/congress-press/blob/main/LICENSE"}