The IRS is not usually known for being hip to pop culture. One provision of the new health care bill, nicknamed the “Snooki Tax,” is causing some controversy.
The details of the Snooki Tax
Officially called “Cosmetic Service Excise Taxes,” the 10 percent tax on tanning services has been called the “Snooki tax,” after the Jersey Shore star’s legendary love of tanning. The excise tax would charge an additional 10 percent on top of all tanning booth time, meaning a $10 session in a tanning booth would cost $11. The tax was created in order to replace the 5 percent “Botax,” a tax on elective cosmetic surgery that was cut out of the bill. The tax is expected to raise $5.8 billion per year.
Arguments against the tanning tax
When the tanning tax was first introduced, tanning salon businesses and some middle-class advocates were extremely frustrated. The argument is that the “Botax” was a tax that would target higher income individuals, while a tanning tax may target middle- and low-income individuals, who are more likely to use tanning services than elective cosmetic surgeries. There is also a jobs argument, saying that higher prices will lead to fewer customers and higher costs, which will lead to layoffs.
Industry grudgingly accepting tax
In a public meeting held about the tax, tanning-industry representatives appeared to be “learning to live with” the new tax. Representatives of a few larger tanning chains have said that they expect this new tax will only be repealed as a part of much larger tax reform. The “tanning tax” is also set to miss several businesses that offer tanning as a free service or perk for other purchases.
The tanning tax in context
The tanning tax is raising temperatures under some collars, but in context, only 12 people attended the regulatory meeting. The health care reform bill as it currently exists is estimated to cost around $1 trillion. This puts the $5.8 billion expected income from the tanning tax at about 5.8 percent of the income needed to pay for the health care bill.
Washington Post: http://www.washingtonpost.com/blogs/ezra-klein/post/the-irs-debates-the-snooki-tax/2011/10/11/gIQAGFKSdL_blog.html
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