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The Tanning Tax is a Public Health Success Story [from Health Affairs Blog]

Elisabeth Ryan wrote a piece about the "tanning tax," posted today on the Health Affairs Blog.


Among the lesser known provisions in the now-rejected Republican House and Senate health care bills was a plan to eliminate an excise tax on tanning bed use. Tanning first became fashionable when Coco Chanel popularized the practice in the 1920s, making lounging outside in the sun a symbol of leisure, relaxation, and health. In the late 1970s, pioneering businesses began to offer ultraviolet (UV) radiation beds as a shortcut to fashionable tanned skin; by the 1990s, indoor UV tanning services were ubiquitous staples of the American beauty industry.

Despite its popularity, research has shown that exposure to UV radiation is the primary environmental cause of skin cancer and tanning beds are “the main source of deliberate exposure to artificial UV radiation.” Melanoma risk is particularly high among individuals who use tanning beds for the first time before age 35. The practice remains most common with female college students in the United States, with more than 50 percent reporting having used indoor tanning beds. Furthermore, despite their higher risk for melanoma, tanning companies aggressively target this demographic through the use of tailored marketing and advertising techniques.

Both the House and Senate health care bills would have repealed the Affordable Care Act’s so-called “tanning tax,” a 10 percent consumer-paid tax on non-medical, UV light indoor tanning services. When the tax was enacted in 2010, the non-partisan Congressional Joint Committee on Taxation estimated that it would bring in $2.7 billion in revenue over 10 years, and would offset some of the costs of the ACA overall. After four years, however, the tax had only brought in about $367 million, far less than the approximate $1 billion originally projected by that time. Some detractors then declared the tax a “failure” and blamed it for the loss of tens of thousands of jobs.

Yet these arguments discount the notion that the revenue was perhaps a secondary goal of the tax, behind its ability to deter people from engaging in the dangerous pursuit of indoor tanning. Per medical and public health groups, the creation of the tax was “a clear signal from the federal government that indoor tanning is a dangerous and potentially lethal activity that Americans should avoid.” The American Academy of Dermatology hailed it as helping to “reduce health costs by discouraging indoor tanning and thereby reducing the future costs of treating skin cancers.” From the public health perspective, a lower-than-expected revenue could be indicative of a significant victory.

Unsurprisingly, the indoor tanning industry criticized the tax from the beginning and now blames the tax for closing upwards of 10,000 salon businesses. Salons have the option of collecting the tax directly from consumers or absorbing the tax themselves; one survey of tanning salon owners in Illinois showed that about 80 percent chose the former, adding 10 percent to the consumer charge up front. The owners in that survey also reported that younger clients were more likely to “notice or care” about the price increase than older clients. Indeed, the Centers for Disease Control and Prevention reported that the number of high school students who reported having artificially tanned has decreased by more than half since the enactment of the ACA, from 15.6 percent in 2009 to 7.3 percent in 2015. While this may signify a downturn from a business perspective, deterring younger clients from beginning or continuing indoor tanning is a particularly desirable public health goal, as “young women under the age of 25 who engage in indoor tanning have been shown to be over 60 percent more likely to develop skin cancers such as basal or squamous cell carcinoma compared to those who have never engaged in the behavior.”

Given Congressional Republicans’ failure to repeal the Affordable Care Act, the elimination of the tanning tax appears to be off the table, at least for now. But the industry may well push for repeal again, possibly through the tax reform initiative Congress seems poised to address. Before Congress acts, however, it should recall that although the revenues raised by the tax may be relatively small, its true goal should be to reduce indoor tanning, especially among young people. Although far more research is needed to establish causation, the apparent reduction in rates of tanning that has occurred since the tax’s enactment suggests that the tax may well be doing its job.