Go Tanning? It’ll Cost You 10% More
Small provisions in humungous bills often realign whole industries. One case, a new tax on indoor tanning products, will increase the price consumers pay for tanning services by 10% to pay for a new healthcare system.
Lasting Impacts of Legislation
Its unlikely that droves of people who tan regularly at tanning salons will cease tanning, however, it is likely that they’ll do it less. The new 10% tax on indoor tanning services will have to be eaten by two parties, either the consumer, or the vendor which must lower its prices to keep its prices the same post-tax.
The Effects
American’s spend $9 billion a year on tanning which will generate roughly $900 million per year for the Federal government which is in turn spending $90 billion a year on health care reform. Thus, only 1% of the cost will be paid for by the new tax. But lets consider the cost. Most tanning salons are small businesses, operated by the owner and a few low-paid staff. In this economic environment it is likely that the business will be forced to eat the cost of the new tax by lowering prices which exponentially lowers profit margins and output. Lowering profit margins and output has a direct effect on employment as well as the productivity of each employee. Also compounded are high overhead costs of maintaining a tanning salon, which further reduce profits. Though not a sizable American industry, people will lose their job due to this legislation, and likely not just in tanning salons.
Tanning Salons Aren’t the Only Ones Affected
One of the biggest provisions of the health care bill will give bio-tech companies a full 12 years of an unrestricted monopoly on new products. Only after 12 years will generic companies be able to produce generic versions. This portion of the bill came with stiff lobbying from the generic medicine industry, but would not be removed. Of all 1100 pages, this is the most important piece of lower drug prices by increasing competition.
