In an effort to locate funding sources for the health care bill currently working its way through the Senate, Congress has actually proposed to create a new tax on elective cosmetic surgeries. The proposal would tax these cosmetic surgeries at a rate of 5%.
The argument is that cosmetic surgeries, including Bo-tox, liposuction, tummy tucks, etc are a luxury of the wealthy, and who better to afford to help with health care funding but the rich? We keep hearing this same song from politicians, but here in So Cal, cosmetic enhancements are almost a requirement for high school graduation, not just the domain of the wealthy. This tax will reach a lot of people, yet it probably won’t find too many outside the medical profession willing to stand up and protest. How many Hollywood stars would come to a rally against taxing nose jobs?
The issue actually raises some interesting questions, like will doctors now be required to collect the tax and remit it to IRS on a regular basis? Will your physician be the one who determines how much of a surgery relates to elective cosmetics versus reconstruction? How will an IRS agent determine if that boob job was reconstructive or elective? Will an audit require before and after photos? What if it was reconstructive as a result of illness or an accident, but the new version was somewhat enhanced? Would there be a partial tax? If so, how would they measure it, by cup size? I can just see a taxpayer arguing this issue with a bureaucrat… “No, I’m really not that big, see?” (zip…)
This new tax will undoubtedly have unintended consequences. Canadians who travel to the US for their medical treatment may now be forced to go to Mexico to save money, taking their medical treatment dollars with them. The poor in the US will claim a disadvantage as they may be priced out of the market, and will demand a government subsidy. This scheme could well cost more than it generates, and then what comes next, taxing tattoos?
As you can see I’m having way too much fun with this. My next posting will be serious, I promise.