A Republican controlled Congress could push through a bill to repeal a medical devices tax, potentially strengthening medical equipment companies and sector-related exchange traded funds.
Year-to-date, the iShares U.S. Medical Devices ETF (NYSEArca: IHI) increased 6.3% and the SPDR S&P Health Care Equipment ETF (NYSEArca: XHE), an equal-weight rival to the cap-weighted IHI, rose 7.6%. [Medical Devices ETFs to Capture Emerging Market Growth]
Representative Erik Paulsen, R-Minnesota, is pushing a bill to repeal the 2.3% excise tax on sales of devices, such as pacemakers and stents, reports Robert Shroeder for MarketWatch.
“I feel real good [about]moving it through the House, and the fact that there’s new Senate leadership that is interested in bringing the bill forward, at some point – I feel good about actually clearing the hurdles to move this bad policy to the president’s desk,” Paulsen said in the article.
Republicans have argued that the medical devices industry has contributed to cutting costs and made healthcare more efficient for patients, so the industry does not need to deal with higher taxes to impede progress, Washington Times reports.
The bill has passed the scrutiny of the Ways and Means Committee and moves to the House floor next. A repeal of the tax has passed the House three times already, and the Senate passed a nonbinding repeal in 2013. [Medical Device ETFs in Modest Post-Election Bounce]