Open Letter to the House and Senate:
Repeal the Indoor Tanning Excise Tax
(PDF)
We, the undersigned organizations representing hundreds of thousands of Americans, urge Congress to repeal the 10 percent excise tax imposed on indoor tanning services established by the Patient Protection and Affordable Health Care Act (PPACA). The tax violates the President’s promise not to raise taxes on middle-class families and is another in a long line of problems with this broken legislation.
The tanning tax was included in the law only after a proposed “Botox tax” failed due to a well-organized lobbying campaign. Projected to bring in $2.7 billion over ten years, the tanning tax was one of 21 tax increases included in the law’s attempt to offset $1.1 trillion in new spending.
The bill’s authors viewed tanning as a politically convenient target for higher taxes because they seemed to regard the activity as out-of-favor. Yet, as is often the case with so-called sin taxes, such as those on alcohol or tobacco products, tanning tax revenue has fallen far short of expectations. In the first half of FY 2011, only $36.6 million was collected. In 2012, of the $300 million anticipated, only $91 million was collected. This is largely attributable to the fact that the tanning levy has a “small base, high rate, and singles out one product for special treatment,” violating the principles of sound tax policy as explained by the Tax Foundation.
Ultimately, the tanning tax places a heavy burden on the shoulders of small business owners. The National Federation of Independent Business estimates that there are 19,000 “mom and pop” businesses affected by the tax. Since 2009 almost 90,000 jobs have been lost and 9,658 salons have shuttered according to the American Suntanning Association. The scheme in PPACA also contains a significant loophole that leaves tanning services provided at gyms untaxed, putting some small businesses at a disadvantage relative to their competitors.
Though it is just one component of the President’s health care law, the tanning tax is emblematic of the serious problems with PPACA. The law’s new taxes and mandates unfairly target certain taxpayers and distort markets. As Congress undertakes more comprehensive efforts to repeal PPACA, it should be certain to repeal the tanning excise tax.
Sincerely,
Pete SeppNational Taxpayers Union Phil KerpenAmerican Commitment Grover NorquistAmericans for Tax Reform John TateCampaign for Liberty Kristin FecteauCampaign to Free America Andrew F. QuinlanCenter for Freedom and Prosperity Lawson BaderCompetitive Enterprise Institute Tom SchatzCouncil for Citizens Against Government Waste Jim BabkaDownsizeDC.org Adam BrandonFreedomWorks Andrew LangerInstitute for Liberty Seton MotleyLess Government Gregory T. AngeloLog Cabin Republicans Amy RidenourThe National Center for Public Policy Research David WilliamsTaxpayers Protection Alliance Judson PhilipsTea Party Nation