Tanning tax


Sen. Harry Reid's tanning tax may end up burning the federal government.

Recall that the original version of ObamaCare included -- among more than 20 separate tax hikes -- a 5 percent federal tax on cosmetic surgery procedures. But after some arm-twisting from plastic surgeons and other doctors, Senate Democrats relented on the Botox levy. Instead, Sen. Reid substituted a 10 percent federal tax on tanning salons.

The tanners, you see, obviously weren't savvy enough to realize they needed to hire a K Street law firm and spread a little protection money -- er, campaign contributions -- to safeguard their interests.

At any rate, proponents of the tax estimated that shaking down the 25,000 stand-alone tanning salons across the country would produce $200 million for the 2011 fiscal year and $2.7 billion over 10 years.

Oops.

On Thursday, the Treasury Inspector General for Tax Administration issued a new report which found that just 10,300 tanning salons filed returns, generating only $54.4 million from July 1, 2010, through March 31.

That means revenues are running at a dismal 36 percent of projections.

The IRS isn't sure whether the problem stems from overestimates on the number of tanning salons -- plenty have closed during the economic downturn and likely because of this tax -- or a lack of compliance. It will now spend time and treasure trying to find out.

"Once this analysis is complete, we will have a better sense of how many of the businesses who have not yet filed are actually subject to this new excise tax," Fatris Fink of the IRS wrote in a memo last month.

Bet the house that this won't be the last time projections on taxes and costs surrounding ObamaCare prove wildly inaccurate.

We hear almost daily how Democrats are committed to creating jobs, cutting red tape and helping small businesses.

And then there's reality.

 

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