As a part of the 2010 overhaul of health care, a tax on indoor tanning was implemented. New Jersey also implemented a tax on elective cosmetic procedures. Neither of these taxes, however, are returning the revenue that lawmakers expected.
Indoor tanning tax
The 10 percent tax on indoor tanning went into effect in July of 2010. The tax was modeled on the taxes on cigarettes and tobacco products that are used to discourage their use.
Tanning has been shown to cause an increase in skin cancer, which has a very high cost to treat. Salon owners, however, are allowed to pay this tax without passing the cost on to customers, which negates the discouraging effect of the tax. Initial estimates put expected income from the tax at $100 million in the first half of the fiscal year; actual income was about $36.6 million.
New Jersey repealing the Botax
Around 2004, New Jersey lawmakers created a first-in-the-nation Botax. The 6 percent tax on the receipts from cosmetic procedures was intended as a way to help fund low-income health care in the state. The tax was expected to bring in $24 million each year. In the last few years, however, the tax has brought in no more than $12 million in a year. Now lawmakers have opted to phase out the tax, reducing to nothing in July of 2013.
A funding quandary
Both the indoor tanning tax and the cosmetic procedure tax were intended to raise money on elective procedures. Not bringing in the money that was expected, however, means that these taxes may not be considered an option for future funding for health care. This is especially important in the future, as government-sponsored health insurance programs will have to wrestle with how to dis-incentivise actions that have a negative impact on individual health, while incentivising actions that improve health.
Sources
Andrea is an entrepreneur, photographer and avid bike commuter with experience in everything from catering and construction to marketing and web design. Andrea writes extensively about technology, healthcare, and food.
CFPB to look into overdraft fees
The newly-opened Consumer Financial Protection Bureau announced Wednesday that it will be looking into banking practices as they relate to overdraft fees. Near the top of consumer complaints, banks say that overdraft fees are a fair way to keep customers from getting overextended. Others say they are just a profit-making venture. CFPB probes banking practices [...]
Supposed Wooly Mammoth footage from Siberia was fraud
A recent viral video purports to show grainy footage of a Wooly Mammoth alive and well in Siberia. The footage has been revealed to be not only a hoax, but involved theft of a legitimate documentary filmmaker’s hard work. A mammoth hoax The Wooly Mammoth is one of the largest mammals to have walked the [...]
Same-sex marriage signed into law in Washington state
On Monday, Washington became the seventh state in the nation to legally allow same sex marriages. Governor Chris Gregoire (D) signed the recently-passed bill into law. The governor signed the bill surrounded by supporters and gay rights advocates. But even as the ink was drying, opponents to the measure were vowing to fight to repeal [...]
Martin Luther King Memorial quote to be restored
The federal government, in response to criticism over a paraphrased quote engraved on the Martin Luther King, Jr. National Memorial statue, agreed Friday to restore the quote to its original form. ‘Drum major’ quote truncates original intent Secretary of the Interior Ken Salazar and National Park Service Director Jon Jarvis announced Friday that the truncated [...]
