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Tax Law

Silver Lining in the Tanning Tax

U.S. taxpayers are under siege as the Obama administration and Congress cook up "creative" ways to generate revenue that can pay for our expanding platter of social entitlements. Excise taxes generate billions for the government to spend.  The new 10 percent tanning services tax being introduced July 1st is adding to the mix. I would make two points:

It's worth noting first that excise taxes cause less political fallout than, say, income taxes. After a while, retail consumers tend to accept them as part of the cost of the product or service they are buying.  So excise taxes are far from being a "third rail" from a political standpoint.

Secondly, excise taxes are imposed to raise money. But many excise taxes are also ostensibly introduced to promote some social benefit, identifying the new higher cost as a "sin tax." This can influence some to at least re-consider their behavior as consumers.

The tanning services tax is a case in point - and a very good one. Social benefits may be just a convenient ploy lawmakers use to persuade taxpayers that more taxation is a good thing. But in some cases, there is real merit. Skin cancer is an insidious, wretched disease that kills, and any self-respecting dermatologist will tell you that tanning salons do nothing to promote health: Melanoma is bad news!

Proposals to introduce excise taxes on "junk" food and soft drink products are also worth examining, in my opinion. The sorry truth is that unbridled freedom to make choices carries costs. These costs are paid not just by those who make the wrong choices, but are also shared by all in order to provide care to people who make poor decisions.

Freedom to make choices is a great blessing. Unfortunately, too many of us don't have the wisdom to manage our life decisions wisely. And this is a scourge that affects all of us.