The 12 Tax Tips of Christmas:
#7 Defer income
The 12 Tax Tips of Christmas:
#8 Make house payments early

Bye-bye Bo-Tax. Hello, Tan Tax

In its effort to fund health care reform the Senate has shifted gears when it comes to personal vanity projects.

As you recall, Senators first proposed a tax on plastic surgery to be collected by doctors. This 5 percent charge was proposed for purely elective cosmetic procedures like Botox injections, rather than for those deemed medically necessary.

From the viewpoint of a writer who loves puns, the best thing about the proposal was the ability to label the levy the Bo-Tax.

But the Bo-Tax has been swapped in the latest Senate health care bill for the Tan Tax.

On Saturday morning, the Senate released its latest version of health care reform, H.R. 3590 or Strengthening Quality, Affordable Health Care for All Americans, which no longer contains the Bo-Tax but instead a 10 percent tax on indoor tanning services.

This new tax would be added to the tanning customers' bills.

But if you use spray tanning instead of a tanning bed, you're OK, although I can't imagine who would want to take a chance of ending up like Ross from "Friends."

Rather, the bill specifically states that it applies to tanning procedures that use ultraviolet lamps (one or more) to give you that "I spent the whole summer on the beach" glow. 

Health and money concerns: Congressional bean counters had estimated the Bo-Tax would bring in $5.8 billion over the next decade. The Tan Tax, which would go into effect next July, is projected to produce $2.7 billion over 10 years.

But that loss of revenue is OK, because the new tax addresses health concerns.

Or as one anonymous aide put it, the tanning tax was added out of "concern that use of these tanning beds creates a health problem with respect to cancer."

That and the fact that the powerful and well-financed American Medical Association totally objected to the Bo-Tax.

"It is not surprising that one primarily cosmetic business is trying to throw another under the bus by transferring a tax from rich doctors and their wealthy customers to struggling small businesses," John Overstreet, executive director of the Indoor Tanning Association, said in a statement Saturday. "The irony is that ultraviolet light at least has proven health benefits, where Botox treatments have none."

The tax won't be dedicated to pay for cancer research. But we can hope that maybe we'll be able to get insurance that will allow for coverage of treatment of a pre-existing cancer diagnosis.

Other tax provisions: This latest Senate health care reform plan also tweaked another tax provision. The increase in the Medicare payroll tax would go from the original 0.5 percent hike to 0.9 percent on those making more than $250,000.

The 40 percent tax on "Cadillac" insurance plans, however, remains at that level. It would go into effect in 2013.

And these and other taxes might change yet again.

There are major differences between the House bill and this Senate proposal. The most significant diversion is that the House calls for creation of a public option and the Senate does not.

The House measure also has a 5 percent surtax on people making more than $500,000.

Yes, health care reform is moving, but we've still got a long, long way to go.

If you want to read more about possible tanning taxation, check out:


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