But what is even more perplexing is just how or why cosmetic surgery won the tax lottery. I fear that this type of legislation opens the door for a whole litany of WTF taxes. I mean why not tack on an additional tax for hair coloring, nail salons, or makeup. These are also vanity products. Frankly where does it stop?
Stacie raises some interesting issues. At the moment, Congress is "digging into the sofa cushions" to find money to keep deficits from becoming even more unmanageable than they already are. Current deficits are not sustainable for the long-term. Something has got to give.
From a selfish point of view, I wouldn't mind taxing anything on her list. I don't consume hair dye, makeup, nail salon services, or cosmetic surgery.
From a public policy point of view, there's a strong argument for taxing cosmetic surgery which does NOT apply to the other products Stacie mentioned.
The government provides large subsidies for the education of physicians. Yes, med students do pay tuition, often taking out large loans to do so, but their tuition does not cover all the costs of their training. Government subsidies for medical education make up the difference.
At the moment, people who purchase cosmetic surgery services are getting it at a discount thanks to the general public's subsidies of their physicians' training.
As a taxpayer, I think it is fine to subsidize the education of pediatricians, obstetricians, family practitioners, internists, cardiologists, neurologists, ophthalmologists, geriatricians, and many other kinds of physicians who--in my view--frequently generate a great deal of public value beyond what they may collect in their salaries, especially in these days of managed care and high malpractice premiums.
As a taxpayer, I get a "return" on my investment in physician education subsidies in many ways from most specialties. Good prenatal and pediatric care helps to create a healthier generation of infants more of whom will grow up to be self-sufficient adults who contribute to society. Good geriatric care can help elderly live higher quality lives and stay in the community longer, reducing the need for expensive long-term care. I was recently reminded of this when several elders I know had great experiences with cataract surgery, which should give them many years of independent living ahead.
More generally, I get a "warm fuzzy" feeling of happiness from knowing there are physicians attending to the pressing medical needs of those who are suffering. I hope I'll never need the services of, say, an oncologist, but I'm glad they'll be around if and when I do need one. That's what an economist would call "option" value. I value having many physician specialties available in the community. I think there are lot of taxpayers who feel the same way that I do. We taxpayers are willing to subsidize medical education for most specialties, but cosmetic surgery is not one of them.
It's a free society, however, and doctors have the right to choose to use their taxpayer-subsidized medical training to go into specialties such as cosmetic surgery if they want to do so. Many physicians find cosmetic surgery an attractive specialty--good predictable hours (middle of the night cosmetic "emergencies" are rare) and no hassles with insurance companies. Given that the general public financed some of their very expensive medical education, taxing those cosmetic procedures is one way for the general public to get some "return" on its investment in their education. Doctors who object to such a tax are free to rechannel the use of their medical talents into directions that society considers more socially valuable.
To put this in economic terms: there are "positive externalities" to the general public that justify some subsidy for the training of physicians in most specialties. It's not so clear that there are many positive externalities to the general public from subsidizing the training of doctors who perform purely cosmetic surgery. In that case, it's not unreasonable for the general taxpaying public to say, in essence, "We want our money back" to those physicians who choose to use their subsidized training to do cosmetic surgery.
To return to Stacie's point, the same arguments do not apply to the producers of hair dye and makeup, nor to the operators of nail salons, since the taxpayers make no special investments in their training.