Obamacare's Tanning Salon Tax Isn't Doing Too Hot
Over the last four years, revenue from the law's "Snooki tax" has paled in comparison to what lawmakers estimated, reports Politico.
Over the last four years, revenue from Obamacare's "Snooki tax" has paled in comparison to what budget forecasters estimated, reports Politico. Originally the 10 percent tax on tanning services, which took effect in 2010, was projected to raise $200 million, then $300 million a year, for total of $2.7 billion over a decade. That's not going to happen — in 2012 the tax raked in a measly $91 million. But before anyone freaks out, remember: the Congressional Budget Office just estimated that, overall, Obamacare will cost $104 billion less than expected.
There are a few theories on why the tanning tax has been underperforming as a revenue source. It's hard for the IRS to determine which businesses need to pay the tax, meaning it's hard to enforce it. Budget estimates are also not an exact science. “You’re always guessing at some level," former CBO Director Douglas Holtz-Eakin told Politico. Tanning salons argue the tax is driving them out of business. “It’s effectively a price increase for our customers,” Barton Bonn, head of the American Suntanning Association, told Politico. That theory is a little weak — a 2012 study found that tanning patrons didn't like the tax, but it didn't deter them from going, according to The Washington Post. Also, if cancer doesn't deter pale Americans from artificially baking themselves, then a couple of dollars won't either.
Whatever the reason, the shortfall's lasting effects might be minimal. Even without hitting peak tanning tax revenues, Obamacare's overall result will be to reduce the federal deficit, according to the CBO. But, as several politicians claimed over the years, regardless of its budgetary impact, the tanning tax will always be racist.