5 MedTech Stocks To Beat Tax Hazards With Positive Returns

The latest $1.5-trillion tax reform plan has been a landmark achievement for President Trump. As usual, in its initial stage, the nation gave mixed reactions on the controversial bill. While a few Americans slammed the new plan as a ‘job killer,’ others found it to be ‘an excellent opportunity to fix a broken tax code.’

While the bill claims to primarily focus on the easing of tax woes for middle-class Americans, the massive cut in corporate taxes tells a different story altogether. In fact, a research report by CNBC reveals that Frank Clemente, executive director of Americans for Tax Fairness, slammed the new tax code as a “a big giveaway to millionaires and corporations,” neglecting the ones who are in real need of it.

Now, it is to be seen whether the bill is fated to meet an overall failure or it gets to fulfill its promises of ‘inclusive economic growth’.

What’s in it for MedTech?

“They are cutting taxes on the wealthy and taking health care away from millions,” — Senate Democratic Minority Leader Chuck Schumer.

Customer Base to Shrink

While the reduction in corporate taxes will encourage the development of expensive cutting-edge MedTech products, the question over its profitability looms large. This is because with a higher number of uninsured and lesser deductions on healthcare costs, the industry is likely to witness a shrinking customer base, indicating a decline in demand for expensive medical procedures and devices.

Tax Decision on MedTech Devices Impending

The MedTech community has been hopeful since Trump proposed policies that entailed the abolition of the infamous 2.3% medical device sales tax. Such high taxes forced companies to lay off employees, limit research and development activities, and reduce capital investment.

Furthermore, AdvaMed, a leading American medical device trade association, had referred to the medical device tax as a ‘significant drag on medical innovation’. Notably, small device companies suffered the most. Amid such worries, a repeal of the tax paradigm is expected to resume an aggressive pace of hiring and investment among the 9,000 America-based medical device manufacturers, instilling investor confidence in the stocks.