Walorski Pushes for New Repeal of Medical Device Tax; Messer’s Reverse Transfer Concept Amended Into Reauthorization Bill

Congresswoman Jackie Walorski (IN-02) has brought forth legislation to suspend the medical device tax for five years. She joined Rep. Erik Paulsen (R-MN) in co-authoring the bill, H.R. 4617, which would delay the implementation of the 2.3% tax that was originally created through the Affordable Care Act. In 2017, Congress delayed the tax for two years, but without intervention it is set to take effect January 1, 2018.

“The job-killing medical device tax would have a devastating impact on Hoosier workers and patients across the country who depend on life-saving medical innovation,” Walorski said. “I am committed to permanently ending this burdensome tax. As we continue working toward repeal, we must protect workers and patients by preventing it from taking effect.”

Congressman Luke Messer (IN-06) and Congresswoman Jackie Walorski (IN-02)

Walorski’s bill was part of a group of legislation introduced by members of the House Ways and Means Committee aimed at stopping Obamacare taxes set to take effect in 2018. The other four measures are:

• H.R. 4618, introduced by Rep. Lynn Jenkins (R-KS), provides relief for two years from the tax on over-the-counter medications, expanding access and reducing health care costs by once again allowing for reimbursement under consumer-directed accounts;
• H.R. 4620, introduced by Rep. Kristi Noem (R-SD), provides relief in 2018 from the Health Insurance Tax (HIT) that drives up health care costs;
• H.R. 4619, introduced by Rep. Carlos Curbelo (R-FL), provides needed relief from HIT for two years for health care plans regulated by Puerto Rico; and
• H.R. 4616, introduced by Reps. Devin Nunes (R-CA) and Mike Kelly (R-PA), delivers three years of retroactive relief and one year of prospective relief from the harmful employer mandate paired with a one-year delay of the Cadillac tax.

Earlier this year, Congressman Luke Messer (IN-06) introduced legislation that encourages a more seamless transition for community college transfer students earning degrees. Messer’s proposal would make it easier for students to earn a degree through a “reverse transfer,” where students who transferred from a community college to a four-year-institution but haven’t completed a bachelor’s degree can apply those additional credits back toward an associate’s degree.

Originally titled the Reverse Transfer Efficiency Act of 2017, it was recently added as an amendment to the Higher Education Re-authorization by the House Committee on Education and Workforce. The provision would streamline credit sharing between community colleges and four-year institutions so transfer students can be notified when they become eligible to receive an associate’s degree through a reverse transfer.

“An associate’s degree can make a huge difference for working Hoosiers,” Messer said. “By making it easier for transfer students to combine credits and get a degree they’ve earned, Hoosiers will have more opportunities to get good-paying jobs and succeed in today’s workforce.” This legislation was supported not only by the Indiana Chamber, but also by Ivy Tech Community College and the Indiana Commission for Higher Education.

Chamber and Rep. Young Release Business Tax Survey Results

As President Obama calls for a “balanced approach” and shared burden to end the current federal fiscal crisis, the Indiana business community is showing willingness to make such a sacrifice, provided there is real reduction in federal spending and substantive reform to simplify the tax code. That’s the overriding message from a recent survey conducted by the Indiana Chamber of Commerce in partnership with Congressman Todd Young (R-9th District), who is a new appointee to the U.S. House Ways and Means Committee.

The electronic survey of Indiana Chamber members and the business community at-large focused on the fiscal cliff, federal tax code, tax reductions, corporate tax system and the U.S. tax structure in general. A total of 188 respondents took part, representing both larger companies (27%) and small businesses (73%).

“Raising tax rates isn’t the right way to go to raise revenue. It may be good politics, but it is lousy economics. Reforming and simplifying the tax code, which will stimulate job creation and economic growth, is the preferred and needed path for Indiana businesses and their employees,” explains Indiana Chamber President Kevin Brinegar.

“We also need to reject Washington’s usual accounting gimmicks and cut actual spending, not just cut the rate of spending growth. We must reform federal entitlement programs – Medicare, Medicaid and Social Security – to address fiscal and demographic realities.”

Survey respondents clearly determined the fiscal crisis was more a spending problem (67%) than a revenue one (less than 1%). Additionally, 33% felt both spending and revenue were the culprits.

When asked to rate the most important principles which should guide tax reform, the top four answers respondents selected were: 1) emphasize shared sacrifice; 2) emphasize global competitiveness; 3) refrain from picking winners and losers; and 4) simplify the tax code.

Many businesses and individuals find the complexity of the tax code too much of a burden, resulting in 60% of individual taxpayers and 71% of unincorporated businesses hiring out their tax compliance. In the survey, nearly 30% said tax code simplification was even more important than rate reduction; 62% labeled simplification important, but not as important as rate reduction. To that end, some 71% of businesses surveyed indicated a willingness to give up some of their favorable tax credits and/or deductions for lower individual and corporate tax rates.

Brinegar and Young both acknowledge that, despite what needs to happen, a short-term measure – extension of credits, etc. for six months, for example – to buy more time for substantive and comprehensive reform is likely the most positive outcome that can be expected this month. 

In addition to the survey of businesses, Young’s office also electronically surveyed constituents in his district with similar questions. The results from the more than 2,700 individual respondents largely echoed the findings on the business survey.

“It’s clear to me there is a real appetite right now for comprehensive tax reform,” said Young.  “As negotiations continue on the so-called ‘fiscal cliff’, tax reform paired with spending cuts isn’t just my desired approach, it’s also the approach favored by individual Hoosiers and Indiana businesses. As a new member of the Ways and Means Committee, I look forward to representing those wishes as we move forward on this front.”

A plurality of individuals said the fiscal crisis was more of a spending problem (46%) than a revenue problem (11%), while 40% said both are to blame. 

Additionally, 54% (compared to 26% opposed) of individuals support a model of tax reform similar to the House Republican proposal of eliminating deductions in order to simplify the tax code. But regardless of what approach is taken, 85.5% of individuals said they support extending most or all of the current tax rates while Congress works through the issue.

Congressman Young is using the information gathered in the survey and via constituent research to help inform his approach to these fiscal issues. Likewise, the Indiana Chamber’s lobbying efforts on federal tax reform are relying heavily on the survey findings.

Charts detailing the results of the tax surveys of business owners and Congressman Young’s individual constituents can be found online at www.indianachamber.com/federal.