Alexander Proposes Repealing Tax on Medical Devices, Tennessee’s Top Export Industry

Says Congress should end “wasteful federal taxpayer subsidy” of wind energy to help pay for repeal of Obamacare medical device tax

Posted on March 21, 2013

WASHINGTON, March 21 – U.S. Senator Lamar Alexander (R-Tenn.) today sponsored a budget amendment in the U.S. Senate that would repeal what he called a “wasteful federal taxpayer subsidy for unreliable, expensive wind energy” to help pay for the repeal of the federal government’s excise tax on medical devices.

“This amendment is about ending two damaging tax policies that are costing Americans billions of dollars, and costing Tennesseans good jobs,” Alexander said. “It gets rid of a 20-year-old, multi-billion-dollar subsidy for unreliable, expensive wind energy that stands no chance of powering our nation’s 21st century economy, and it repeals the Obamacare tax on life-saving medical devices – Tennessee’s top export and an important source of good jobs.”

The medical device tax, passed as part of President Obama’s health care law, places a 2.3 percent excise tax on medical device manufacturers. Tennessee’s Department of Economic and Community Development has identified medical device manufacturers as among the state’s most important exports, with U.S. Census data showing its $2.1 billion in 2012 ranks at the top of all state exports by dollar value.

In February, Smith & Nephew, a medical device manufacturer with a large presence in Tennessee, announced it would be laying off nearly 100 employees in Tennessee and Massachusetts as a direct result of the new tax on medical devices. Alexander’s amendment would repeal that tax, as well as a recently passed, one-year, $12.1 billion tax credit that subsidizes the production of electricity through wind turbines.

Alexander continued, “The federal government’s taxpayer subsidy of wind is interfering with the marketplace. After receiving the subsidy for 20 years, the wind industry produces only 9 percent of our pollution-free electricity. It’s time for wind power to take its place in our free-market system and compete with natural gas, nuclear and coal.”

The amendment’s ultimate goal would be to repeal both tax provisions without increasing the federal debt.

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