CongressDaily - Plastic Surgery Tax Eyed As Revenue Raiser

Congress considers a tax on plastic surgery:

Face-lifts, tummy tucks and hair transplants could be hit with a new tax to help finance the trillion-dollar healthcare overhaul plan, according to sources familiar with the Senate talks.

The Senate Finance Committee has discussed imposing a 10 percent excise tax on cosmetic surgery deemed unnecessary for medical purposes. The idea was broached in a meeting with OMB Director Orszag in mid-July, after which Senate Finance Chairman Max Baucus told reporters he had heard some 'interesting,' 'creative,' and 'kind of fun' ideas.

I have two problems with this concept in general.

1. When ever the government starts to tax an activity that was previously untaxed or taxed like other similar activities, they will never make as much money as they think. As a service, most medical surgeries are exempt from sales tax laws, although some states have a sales tax on some services and comestic surgery may fall into a taxable category. I have no idea how much cosmetic surgery does as a business in American, but surely a multi-billion dollar market exists and the government sees it as a source of revenue. Estimates will be made based on how much that market currently is. But if you tack a 10% surcharge on the industry, you can bet that the industry will shrink by at least 10% if not more and then not enough money will becoming in.

2. If the government is looking at elective cosmetic procedures to fund the government, perhaps, just perhaps, Congress is spending too much money.