Highlights From The House Debate On Tanning Tax That Turned Into A Sideshow
Among the lesser-discussed points of the Affordable Care Act repeal and replace legislation is a move to get rid of a 10% tax on the use of tanning salons. Why is this suddenly an issue, and how did it cause the House Ways and Means Committee’s discussion of the bill to devolve into a sideshow, complete with debates on the merits of ice cream and Spain’s tax on the sun?
In an effort to both curb overexposure to UV light, and as a potential revenue source to pay for new healthcare initiatives, the Affordable Care Act included a 10% tax on indoor tanning.
The GOP replacement plan [PDF], dubbed the American Health Care Act, includes a full-out repeal of this tax starting in 2018. According to an analysis [PDF] by the Joint Committee on Taxation (JCT), repealing the tanning tax would result in approximately $600 million less tax revenue being collected over a 10-year period.
Skin Cancer Is A Long-Term Problem
The tanning tax portion of the hearing didn’t begin until about nine hours into the session on Wednesday, and critics of the measure immediately pounced on the fact not only does the bill eliminate a small but steady tax revenue stream, it could result in higher healthcare costs.
Thomas Barthold, Chief of Staff for the JCT, was on hand to answer questions about the cost implications of repealing the tanning tax, and he explained that his team had not factored in the potential for higher rates of skin cancer. His explanation left some lawmakers scratching their heads.
“Let me note that most effects from cancer would probably be outside the budget period,” said Barthold. “My knowledge of skin cancers — which is not as a professional but as a recipient — is that it tends to be longer developing so it would tend to have its effect outside the budget period.”
Rep. Sander Levin of Michigan pointed out that those people who might tan more because of the repealed tax — thus increasing their odds for skin cancer — probably wouldn’t have just “started tanning the day we repealed” the tax.
$1.6 Trillion In Lost Wages????
Rep. Jim Renacci (OH) argued in favor of repealing what he described as a “job-killing” tax, citing an array of very large numbers; perhaps impossibly large.
Renacci claimed that 81,000 Americans had lost their jobs because of this tax. His source for this figure was a 2016 post on the Natural News website. That story was merely repeating figures given in a separate AP story, but without attributing to any source other than the generic tanning industry.
We’ve attempted to ask that reporter who provided that figure for this article but have not heard back. Additionally, this same AP piece points out that there are other factors — like state laws limiting use by minors, and increased consumer awareness of potential harms — that likely contributed to tanning salon closings.
But that didn’t stop Renacci from doing a bit of math and concluding that these 81,000 lost jobs — at $10/hour — somehow resulted in $1.6 trillion in lost wages, nearly equivalent to the estimated cost of Defense Dept. spending on 16 years of combat operations in the Middle East.
Except, no.
Assume that those 81,000 people had worked 40-hour work weeks (a big assumption for a small business like a tanning salon) at $10/hour and they remained out of work for an entire year after being fired (another sizable assumption, given that the median time on unemployment is currently around 10 weeks). That still only adds up to $1.6 billion, or 1/1000 the figure that Renacci claimed.
When Rep. Levin described Renacci’s figures as “wacky,” the Ohio congressman defended his math, stating, “My figures exactly came from the reference that I gave you.”
Renacci’s office was not so steadfast in defending the $1.6 trillion figure. A rep for the congressman tells Consumerist that he made an honest mistake during the hearing while trying to do math on the fly.
It’s All About The Ladies
Nearly ten hours into the day, the discussion on tanning took some time out to honor the women of the world. And to point out out how unfair this tax is to them.
Rep. George Holding of North Carolina opened his remarks by talking about the 9,600 tanning salon closures that he blames solely on this tax.
“Of those 9,600 businesses, I would like point out that the majority of the ones that have closed were women-owned small businesses,” said the congressman, who has previously introduced three pieces of legislation — including one just last month — to repeal this tax. He must be a huge fan of women-owned businesses.
What Holding didn’t mention is how much money his campaign has received from the tanning industry. He was the top recipient in contributions from the Indoor Tanning Association, the second most from the American Suntanning Association. The biggest donors for that PAC are connected to the Palm Beach Tan chain, a source of another $16,800 in campaign financing for Holding.
But you know who’s really doing all this for the females of America? Rep. Jason Smith of Missouri, who we could listen say “Google” all day long.
“Most of the time, we talk about who is burdened with that tax, but that hasn’t really been the conversation here,” said Smith. “So I wanted to see who predominantly is taxed… is it men? Is it women? So I went and did a little Google search, and what I found on Google is roughly 80% of who’s taxed are women. Out of the $600 million that has been created by this tax… $480 million has come from the backs and the pockets of women.”
But he wasn’t done.
“Today is International Women Day,” explained Smith, while mis-stating the holiday’s name. “It’s interesting that no one is bringing that up… Whoever imposed this tax seven years ago, before I was here, of why did they just randomly just pick this tax to have it paid for on the backs of so many females?”
Earlier in the evening, Rep. Lloyd Doggett of Texas tried to bring some reality into the argument that this repeal is all about benefiting those female customers, pointing out that the “millions of high school girls” and others who tan a lot were not the ones actively advocating for this tax cut, while “there were plenty of tanning salon chain owners that were here begging for tax relief.”
What About Taxing The Sun?
Smith then took things to a viral video level of hilarity when he not only dared to badmouth ice cream, but suggested taxing the sun.
“There’s a lot of taxes out there,” the congressman noted, perhaps unnecessarily given the audience. “You could tax a lot of different items if you want to stop behavior. I love ice cream. Ice cream’s probably not the most healthy thing to eat. Why is there not a tax on that? If you look at the number one cause of cancer, it’s not tanning beds. Do a Google search. It’s the sun. The people over here haven’t found too many taxes that they dislike, so why have they not proposed a tax on the sun instead of tanning beds?”
Rep. Levin was having none of this ice-cream bashing, explaining to Smith that the reason Congress chose to tax tanning salon use because there is scientific evidence linking excessive tanning to cancer.
“What’s the difference?” asked Smith. “Why did you not look at a sun tax, because that’s the number one cause of skin cancer.”
“I’ll tell you why, because it’s a little hard to tax the sun,” said Levin, to chuckles around the committee.
Leading Smith to assert that “Spain taxes the sun!” without explaining that the controversial “sun tax” in Spain has nothing to do with tanning, but with use of solar cells.
The tax was originally projected to bring in more than $2 billion to the Treasury during its first 10 years, but now looks like it will only result in less than $1 billion over that time. The most recent White House Office of Management and Budget numbers predicted annual tax revenue of between $86 million to $88 million in each of the next five fiscal years.
Regardless, the Ways and Means repeal bill was eventually approved to be sent to the full House, and the Energy & Commerce Committee repeal bill soon followed. It seems unlikely that repeal of the tanning tax will be a sticking point for any of the lawmakers currently on the fence regarding the ACA repeal and replace plan.
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