By Stacie Clifford Kitts, CPA

Mary O-Keeffe over at Bed buffaloes in your tax code has responded to my post:

Let’s Talk Fuller Lips, Larger Breasts, Slimmer Thighs, and H.R. 3590 (Patient Protection and Affordable Care Act.).

Her answer to my question is thoughtful and while I do agree with Mary’s point that there is some government subsidizing in the medical profession, I think her argument provides fodder for the slippery slope that this type of public policy inspires.

In my previous post, I say:

“But what is even more perplexing is just how or why cosmetic surgery won the tax lottery. I fear that this type of legislation opens the door for a whole litany of WTF taxes. I mean why not tack on an additional tax for hair coloring, nail salons, or makeup. These are also vanity products. Frankly where does it stop?”

Mary’s answer is this:

“The government provides large subsidies for the education of physicians. Yes,they do pay tuition, often taking out large loans to do so, but their tuition does not cover all the costs of their training. Government subsidies for medical education make up the difference. At the moment, people who purchase cosmetic surgery services are getting it at a discount thanks to the general public’s subsidies of their physicians’ training.”

Read Mary’s entire post.

Given the current economic state, and the need for our government to find revenue sources, I worry what source will be next.

Are we now to accept that any government subsidized product or profession is subject to this excise tax? If this is your position, then be wary, there are hundreds of thousands of government subsidies in all types and forms.

Tell me – are we now to explore the background of every product that we buy and determine if the government ever subsidized research or provided tax breaks? How soon do you think it will be before it becomes “public policy” to tax all of our choices, in products, or services, or lifestyle? Moreover, who gets to decide which items are wicked enough to be taxed first.

So again, I ask, why did cosmetic surgery win the tax lottery, why not the treatment of acne? After all dermatologists went to medical school too, their education was also subsidized. The answer is clear, because taxing little pimple faced teenagers for their acne treatment would tick people off. It doesn’t matter that this procedure is also elective and even vanity driven.

However, people who elect to have cosmetic surgery are perceived as vain, spoiled, overindulged, and sinful.

Do you see how letting our government tax our life choices even when those choices are not harmful to the public welfare creates a morality clause in our tax system by giving lawmakers the power to tax those items or services that they believe are wrong?

By Stacie Clifford Kitts, CPA

I really don’t have anything against women or men for that matter, who want to make some appearance enhancements.

However, as it turns out, some politicians do.

Here is the reality, “average” folk seek out and pay for cosmetic surgery. The reasons why are probably as varied as the numerous cosmetic procedures available to anyone willing to go there. I suppose if you are interested enough, you can get a comprehensive list of reasons from your local therapist.

Nevertheless, I think you will be surprised to learn that you probably know someone who has gone under the knife. Frankly, I don’t know many women (over 35) who haven’t had something done, even if it’s just a little Botox around the eyes or the permanent removal of some unwanted hair.

However, regardless of a person’s reasons, vanity it seems, is something our lawmakers believe should be discouraged and even punished.

The Patient Protection and Affordable Care Act now in the Senate has declared VANITY as the eighth deadly sin punishable by the imposition of a 5% excise tax. The bill, now in its fourth draft was originally introduced in the House as the Service Members Home Ownership Tax Act of 2009 by a myriad of politicians. You can check out the first draft, which includes a list of those politicians here.

The bill, which apprises to seek affordable healthcare also imposes an additional tax on those people wishing to improve their appearance or self esteem via cosmetic surgery.

Of course, the current draft has some fairness weaved in for those needing reconstructive or corrective procedures. Here’s a taste of what we get:

`(a) In General- There is hereby imposed on any cosmetic surgery and medical procedure a tax equal to 5 percent of the amount paid for such procedure (determined without regard to this section), whether paid by insurance or otherwise.

`(b) Cosmetic Surgery and Medical Procedure- For purposes of this section, the term `cosmetic surgery and medical procedure’ means any cosmetic surgery (as defined in section 213(d)(9)(B)) or other similar procedure which–

`(1) is performed by a licensed medical professional, and

`(2) is not necessary to ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or disfiguring disease.

As a CPA and advisor, my first thought on the subject is just this, if after you have maxed out your retirement contributions, saved for a rainy day (at least 6 month salary set aside), figured out how you are going to meet your children’s needs including college, purchased adequate medical insurance, considered life insurance and other retirement arrangements, then it might be okay to check out a cosmetic enhancement – if that’s your thing.

Now assuming your procedure of choice is elective, let’s look at the tax cost under the provisions of the proposed “vanity tax.” Let’s assume that your choice is a new rack, which will cost you $10,000. The 5% tax on your new boobs would be an additional $500. Now from a realistic standpoint, and in my humble opinion, if you can’t scrape together an additional $500, then frankly you probably can’t afford the boobs and shouldn’t be getting them anyway.

But really – let’s put the “who can afford it” stuff aside and delve in. This provision actually falls under the WTF category – don’t you think?

I can’t say that I am totally opposed to taxing behavior. That is, I agree with sin taxes. Taxes on cigarettes and alcohol for instance do provide a certain amount of good since these products have been shown to cause harm to the public welfare. Likewise, the cost of treating people who have made themselves sick by indulging in unhealthy activities or behaviors must be considered – I get that – and if a tax on so called unhealthy products helps to relieve the public burden, then so be it.

But is cosmetic surgery really sinful? Personally, I fail to see how it is. Maybe our lawmakers can explain to me how slimmer hips, larger breasts, or plumper lips harms the public welfare or places a financial burden on the government.

But what is even more perplexing is just how or why cosmetic surgery won the tax lottery. I fear that this type of legislation opens the door for a whole litany of WTF taxes. I mean why not tack on an additional tax for hair coloring, nail salons, or makeup. These are also vanity products. Frankly where does it stop?

I am all for affordable health care, balancing the budget, and reducing debt. But come on lawmakers, I find it hard to believe that you can’t do better.

If you are interested in perusing the entire bill, you can find it here.

Related posts:

An Interesting Rewrite for the Vanity Tax H.R. 3590 Looks As if Congress Found a Vanity Product with Enough Sin to Justify a Tax

Vanity Tax = Tax the Other Guy Legislation HR 3590

Babbling Incisively on About Fuller Lips, Larger Breasts, Slimmer Thighs and H.R.3590

Still Talking About Fuller Lips, Larger Breasts, Slimmer Thighs, And H.R. 3590

Let’s Talk Fuller Lips, Larger Breasts, Slimmer Thighs, and H.R. 3590 (Patient Protection and Affordable Care Act.)