ELLIS: Obamacare’s own war on women

The tanning tax is devastating a mostly female-owned industry

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Before the ink was even dry on the Supreme Court’s Burwell v. Hobby Lobby decision this week, the foot soldiers of liberal outrage were out in force and in donors’ email inboxes. Suddenly, a religiously inclined employer not required by the government to pay for the abortifacient contraceptive choices of its employees is engaging in a “war on women.” What’s ironic is that the Obamacare law — the one which gave rise to this court case in the first place — has a clear war on women right in the language of the statute itself: the infamous “tanning tax.”

One of about 20 new or higher taxes in Obamacare — tax hikes which total more than $1 trillion over the next decade, according to the Congressional Budget Office — the tanning tax was one of the first to rise to national attention. It takes the form of a 10 percent federal excise tax on indoor tanning-salon sessions. From the beginning, this tax was emblematic of the cash-grab mentality of Obamacare, as tanning salons have very little in common with making sure most Americans have access to affordable, quality health insurance. They are a target of the federal tax beast, however, and that was good enough.

It was assumed by congressional tax writers at the time that the tax would simply be passed along harmlessly from tanning salons to their (probably rich) consumers, as a kind of add-on that would barely be noticed. After all, the only people who get indoor tans are movie stars, models and professional talking heads on television. They would hardly notice a few extra bucks added to their lavish tanning-salon fees, right? Besides, do taxes really have an impact on the economic choices people make?

There’s an old expression about taxes: If you want less of something, you tax it. As a corollary, a shrinking tax base cannot yield the tax revenues one expects if you kill the golden goose to get at the eggs. Both of those well-known tax-policy effects have come to pass in the tanning tax.

In the past four years, an estimated 8,000 tanning salons have closed their doors, according to the American Suntanning Association. This has cost 64,000 employees and owners of these tanning salons their jobs. Seventy percent of all tanning salons are owned by women — an astonishingly high number, considering that women own less than 30 percent of all firms in America. This is clearly an industry where women feel their unique talents fit in very well. This tax on female-owned tanning salons (written by overwhelmingly male tax staffers and voted into law by an overwhelmingly male Congress) is coming at a tremendous price to their slice of the American dream.

The tanning tax disproportionately impacts women, yet that fact is conveniently overlooked. Empty storefronts and longer unemployment lines for female-owned businesses seem like a more tangible war on women than a Christian family-owned enterprise that wants no part of paying for abortion.

With a stubbornly high unemployment rate of more than 6 percent (worse if one takes into account discouraged and underemployed workers) and businesses in every sector still fighting to emerge from the recession, our government should be fostering small-business growth instead of attacking it. Every job lost and every business closed hurts American families, takes money out of the economy and weakens our national recovery. Businesses — particularly those that tend to be owned by female job creators — should be encouraged to grow across all economic sectors, and the professional tanning industry should not be an exception.

Surely this tanning tax is worth it for the greater good, right? The Internal Revenue Service must be flush with tanning-salon cash, bringing in copious sums to help struggling families obtain health insurance. Not so much. The IRS reports that the tanning tax brought in a paltry $15 million in 2010, $86 million in 2011 and $91 million in 2012. While those numbers are apparently large enough to decimate an entire industry, they are laughable compared to the $2.7 billion the tax was supposed to generate in its first decade of implementation. Keep in mind that all the tax increases in Obamacare are estimated to generate $1 trillion over the next decade, making this tax — devastating as it is to the tanning-salon owners who lost their businesses and employees who lost their jobs — truly a nuisance rather than a source of government revenue.

Obamacare must be repealed, in whole or in part. A very good place to start — and to help rebuild a devastated startup sector — is to repeal the just plain dumb Obamacare tanning tax.

Ryan Ellis is tax-policy director at Americans for Tax Reform.

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