Tags: Economic- Crisis | Healthcare Reform | Obamacare | Tanning | Tax | revenue

Obamacare Burned by 'Tanning Tax'

By Dick Armey   |   Friday, 10 Feb 2012 03:59 PM

From the FreedomWorks website.

In its first nine months, the Obamacare “tanning bed tax” raised only $54.4 million, barely one-third of the roughly $150 million predicted when the controversial — and costly — healthcare law was being debated in Congress.

The “tanning tax” is just one of the many new taxes created in Obamacare. Its failure to meet expectations further erodes the credibility of a law that, according to polls, is opposed by a solid majority of Americans.

While some of the revenue shortfall may have been due to first-year bungling by the Internal Revenue Service bureaucracy, the more likely explanation for the overly optimistic projection is that congressional budget “experts” failed to take into account the basic laws of economics.

Taxation fundamentally alters behavior because people respond to incentives. A quarter of salons surveyed have reported a drop in business since the tax began to be collected on July 1, 2010. One possible reason for the relatively meager revenue derived from the tax is that some tanning salons already on the brink of going out of business were pushed over the edge by this tax.

Of course, customers might also be switching to tanning methods that don’t fall under the new tax, such as spray-on tans and tanning lotions. This might please those who advocated the tax in order to lower the use of dangerous tanning beds, but Americans concerned about the debt and deficit have to be worried.

Obamacare will already cost $2.6 trillion over its first 10 years of full operation. Overly optimistic revenue projections across the board will only further increase the deficit and drive America deeper into debt.

Repealing Obamacare and its hundreds of disastrous or problematic provisions and programs and replacing it with market-based solutions is the only realistic first step in turning the tide of federal spending and addressing the rising costs of healthcare.

The farther one digs into the 2,801 page Obamacare bill, the more problems one finds. If the Democratic congressional leaders who supported this massive law couldn’t properly estimate the effects of a simple, 10 percent excise tax on indoor tanning services, why should we believe their claims that Obamacare “won’t cost taxpayers a dime” and repealing it will “increase the deficit”?

This is yet another reason why we need to make 2012 the last year of Obamacare.




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