Baucus health plan would levy $4 billion-a-year in taxes on heart valves, power wheelchairs, insulin pumps etc.

From the AP:

Amid Republican ridicule, a Democratic chairman backed down Tuesday and exempted consumer items of $100 or less — from condoms to contact lenses — from a proposed tax on medical device manufacturers. It would help pay for health care coverage for the uninsured in comprehensive legislation.

But Finance Committee Chairman Max Baucus, D-Mont., left intact a $4 billion-a-year levy on the medical devices industry, which makes everything from heart valves to imaging machines to tongue depressors.

Baucus' last-minute switch means that contact lens solution... and home pregnancy tests — among many other items — will not be taxed... But more expensive consumer medical goods, from power wheelchairs to insulin pumps and hearing aids, would still get hit...

The medical devices industry says that eventually, the taxes will get passed on to consumers. Republicans say that amounts to a violation of President Barack Obama's campaign pledge not to raise taxes on the middle class...

The companies say they can't just take a $4 billion hit and suck it in...

A UBS Investment Research study... estimated the tax equals about one-fifth of industry profits.