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Back in to the Coffer

Medical device companies in the US are benefiting from a suspension of a tax on their revenue, NPR reports. According to the Congressional Research Service, medical device companies paid some $2.4 billion in taxes in 2014. However, the tax has been suspended for two years.

The Minnesota-based Smiths Medical, which makes more than $1 billion a year, had paid $10 million a year in medical device taxes. But, George Montague, its chief financial officer, says that money will now go back into the business.

"We're making significant investment in our product portfolio — in improving our product portfolio," Montague tells NPR. "And what this enables us to do is accelerate some of that investment." His company is further planning to add additional jobs.

However, whether eliminating the tax entirely will increase the number of new jobs isn't clear as the Congressional Research Service found that it had only a small influence on employment.

Piper Jaffray's Brooks West tells NPR that smart device makers should re-invest those freed-up funds into their business. "Politically, they better spend this money on R and D," West adds, "or the government can look at this and say, you know, 'Look, if you just pass this on to the shareholders, we're going to re-impose the tax.'"

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