Durable Medical Equipment Essay Example | Topics and Well Written Essays - 2500 words

Durable Medical Equipment - Essay Example The Government, through this act, intentionally ignored the fact that most of the American citizens were already in use or covered by the Medicare, Medicaid and other private insurance covers. This would not lead to the upsurge or little increase in sales of the medical devices assumed by the state to enable the companies offset the added cost of nearly $30 billion that was expected to accrue in this industry as per Congressional Budget office foresight (Bayh par 1). The company’s bottom line is that, the tax cannot be passed to the buyer, as most of those devices are directly sold to public hospitals, physicians, and other health service providers through long-term contracts signed, which locked the prices. A 2.3% tax on the company’s sales is equal to almost a 15% on the normal tax on profits, and if this added to the mandatory 35% corporate tax, it totals to 50% as the eventual tax imposed on the industry. This severely affects these companies, as they have to pay th is excise tax whether they are making sales or not (Bayh par 2). Therefore, it would have been much simpler to peg the tax on profits rather than on sales revenue.Other players in the industry such as the medical software developing companies, which are small and numbering to hundreds, are the worst hit by this legislation. Their products, Apps, have a potential for revolution in raising the practice of medicine in the US and globally (Bayh par 2). The effect of this taxation is already manifesting itself; for instance.