Congress Just Says No to Tanning Beds

With the massive number of provisions in the health care bill, it's taken a while for everyone to process the minutia of the thing. Now that tax season is here, the parts of the bill that create new tax liabilities are becoming more apparent.

One such provision is the new ten percent excise tax on indoor UV tanning services. The excise tax falls into the category of "sin" taxes, like those imposed on profits from selling cigarettes or running casinos. Sin taxes have been around almost as long as taxes have in the U.S., and are the government's way of discouraging behaviors that society deems risky, to the benefit of the Treasury.

Scientific studies have inevitably shown the strong link between excessive tanning and skin cancer, and most people would agree that the industry should have some government regulation, particularly with regard to use by teenagers, who are at the highest risk for exposure to UV rays. Some states have enacted laws to regulate the tanning bed businesses and others have declined to do so.

While cigarettes and excessive tanning are issues that affect our nation's health, are higher taxes on these products and services effective in reducing the problems they cause? Many would argue that cigarette use is unaffected by increased price, because most smokers become addicted before buying cigarettes and those who are already addicted will pay any price. Can the same be said for tanners?

A more important question is whether the federal government should be stepping in to regulate "sins" at all. If a product or service is truly dangerous to our health, then perhaps the states should regulate or criminalize it. Otherwise, it seems to me that a system where the government is making money off of health hazards creates an incentive to keep those health hazards around.

Once a tax is created, more programs are introduced to spend the money raised by the taxes. However, if the revenue from the newly created tax is less than projected, the corresponding new spending is not reduced. Therefore if a sin tax "worked" in the sense that it decreased the behavior it was meant to discourage, the national debt would increase as a by-product.