You’re so vain, I’ll bet you think this blog is about you, don’t you?

That’s because Americans spent $10.3 billion on 12.1 million cosmetic procedures last year. And Congress thinks it’s time to cash in. The Senate is currently considering imposing a 10% excise tax on cosmetic procedures that are not medically necessary. These would include nose jobs, facelifts, teeth whitening, Botox, hair transplants and boob jobs – basically items which are disallowed as deductible medical expenses under Section 213(9) of the Tax Code:

(9) Cosmetic surgery.—

(A) In general.— The term “medical care” does not include cosmetic surgery or other similar procedures, unless the surgery or procedure is 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.

(B) Cosmetic surgery defined.— For purposes of this paragraph, the term “cosmetic surgery” means any procedure which is directed at improving the patient’s appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease.

Revenue raised from the tax would – what else – help fund the $1 trillion health care reform plan. Senate Finance Chairman Max Baucus (D-MT) has alternately described many tax proposals, including this one that came out of committee today, as “interesting,” “creative,” and “kind of fun.” Boy, those Senators know how to have a good time.

But will the tax work? No (you heard it here, folks). And here’s why not:

  1. It will be a struggle to get the tax through Congress. Plastic surgery is huge, huge business these days. The industry has a fairly powerful advocacy group (American Society of Plastic Surgeons) which has already voiced opposition to the tax. Additionally, the ASPS believes that the tax would be (*cough*) “discriminatory to women” – just wait until that gets some spin on The View.
  2. While there are criteria for the tax (as set out in Section 213 of the IRC), it is largely subjective. As proposed, the burden of collecting the tax would likely fall on the doctors performing the procedure. Conflict of interest, anyone?
  3. It will be an administrative nightmare. Many doctor’s offices are already swamped with insurance and other paperwork. Taxing *some* cosmetic procedures and not others will be overwhelming. So they just won’t do the paperwork.
  4. Historically, similar taxes have not been successful. Only one state continues to have an excise tax on cosmetic surgery on the books: New Jersey. The tax has been controversial and has only brought in about 25% of anticipated revenue. Why? See #2.
  5. And while this looks like a tax on the rich, which sounds better to most taxpayers than taxing the middle class, at least one ASPS survey indicated that a majority of patients had income levels of between $31,000 and $60,000: solidly middle class. Patients earning more than $90,000 constituted a mere 13% of business (my guess is that they didn’t survey in Hollywood). Congress doesn’t want to be viewed as raising taxes on the middle class.

So here’s my new tax planning advice: stay away from soda. Congress will tax it and it will make you fat. And then you’ll want a tummy tuck and Congress will tax it.

To save on taxes, drink water. At least until Congress decides to tax it, too.

Print Friendly, PDF & Email
Author

Kelly Phillips Erb is a tax attorney, tax writer, and podcaster.

Comments

  1. this idea makes me more concerned about the people who currently get “voluntary” medical procedures classified as plastic surgery for mental health reasons. Trans patiens, who granted don’t have much sway and are generally frowned upon by society, use chest reconstruction, breast augmentation, orchiotomies, and vaginoplasty (among other operations) to make their bodies fit their self perception. While the APA sees many of these surgeries as necessary for treatment of the disphoric diagnosis, they are still treated as optional by health insurance companies, and I’m worried a tax that got passed would follow a simmilar suit. Many trans patients appear to be low to middle income and most struggle to fund their surgeries w/o needing to worry about an additional tax. I feel like such a tax would make their psychological treatment that much more difficult and expensive.

  2. You’ve got to be kidding me. How can you tax consumers for procedures that aren’t covered by insurance and use that revenue to assist with the health care reform plan and others insurance?! It just doesn’t make sense, especially if the purpose of the reform is to be more “fair”

  3. I really don’t think we should be encouraging this kind of cosmetic surgery in this way. There are safe, noon surgical alternatives after all

Write A Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Skip to content