Bipartisan support for repealing the 2.3 percent excise tax on medical devices doesn’t mean the tax will get repealed any time soon.
The Senate’s 79-20 vote yesterday in favor of repeal was a non-binding amendment to the budget. Thirty-four members of the Democratic caucus joined all Republicans to back repeal.
“It sets the stage for some negotiations on it in the future,” said Sen. Amy Klobuchar, a Democrat and leading opponent of the tax whose state of Minnesota is home to device companies such as Medtronic Inc.
Klobuchar said today that the issue would likely be addressed as part of a major bipartisan budget deal or an overhaul of the tax code.
There are two reasons why repeal of the device tax won’t advance quickly.
First, lawmakers disagree on how to offset the approximately $30 billion increase in the deficit that would come from repealing the tax. Second, the House of Representatives, where tax legislation must start, doesn’t plan to pass any tax bills before it considers its rewrite of the tax code.
The device tax, enacted in 2010, took effect this year.
Two leading Democrats — Finance Committee Chairman Max Baucus and Majority Leader Harry Reid — voted against the proposal.