peach

DC Notices That ‘Tan Tax’ Has Failed

Friday, April 25th, 2014


The ‘Beltway’ is starting to figure out that a 10 percent tax on UV tanning truly was a job-killing, underperforming tax based on back-room politics and funny math.

Politico — perhaps the Capitol’s most-read policy-insider journal — published a major story Thursday documenting the tax’s failure to come close to revenue projections while closing thousands of tanning businesses and pulling thousands of jobs out of the economy.

“A 10 percent tax on tanning salons, imposed as part of Obamacare, is not raising nearly as much money as the government predicted,” Politico reported. “So far, it’s generating less than half the $200 million budget forecasters anticipated it would produce annually, according to IRS figures.”

Actually, it’s more like one-third the forecasted revenue.

Politico’s story hits as the American Suntanning Association (ASA) has stepped up efforts to call for repealing the 10 percent tax. Team ASA has held more than 50 meetings with key Republican and Democratic policymakers with the IRS’ own data in hand, as well as job loss figures and business closings. Repealing the tax is one of ASA’s major federal policy objectives.

The 10 percent excise tax on UV tanning was a last-minute addition to the Affordable Care Act in December 2009, “swapped in by Senate Democrats in place of a cosmetic surgery tax — dubbed the ‘bo-tax’ — just days before they approved the bill in a rare Christmas Eve vote,” Politico reported, joining the New York Times and The Wall Street Journal as national news groups who have identified the capricious manner the tax came about.

The story put on record a point ASA has been making in Washington since the association’s formation in 2012: The tax was imposed without any due process of how it would affect anyone nor how much it could reasonably collect to help pay for the Affordable Care Act. The Congressional Budget Office had no clue how this tax would affect the market and no idea how much the government could reasonably expect to collect. In Politico’s story, former Congressional Budget Office Director Rudy Penner called such a projection “a nightmare.”

The nightmare today for Washington is how the tax has worked out.
•It has closed 8,000 women-owned businesses since 2009.
•It has cost the economy an estimated 70,000 jobs.
•It has raised only 1/3 of revenue projections for the Affordable Care Act.

“It’s effectively a price increase for our customers,” Barton Bonn, president of the American Suntanning Association who owns 19 tanning salons, told Politico. “Anybody knows that if you increase the price on a product or service, some people are not going to show up after the price increase, and that’s what occurred.”

suncitypembroke

Thank for sharing peach, now let see what washington next card trick.

Turbo Girl

Still, 1/3 of 200 million is gonna be hard for them to give up.

Once government gets there grubby's on it, they are very reluctant to go. Let's hope the business closing and lost jobs will be enough.

__________________
[SIGPIC]

Wynwood

The other thing ASA needs to be pointing out to lawmakers is the false justification for the tax, i.e. that indoor tanning causes health problems that should be paid for by tanning bed users. I've found it to be very powerful to ask legislators if they have ever actually read a study that links indoor tanning to melanoma.

peach

The tax was purely political. Obama needed AMA support for Obamacare. The tanning industry tax was the carrot that the Dems.
dangled in front of them to get their by-in for the ACA.

Very few excise taxes (if any) are ever repealed. You can tell that by looking at all of the stupid line items on the 790 Excise tax form that you use to file your tan tax. A tax on Arrows?

Chances of ever getting rid of it-zero.