One interesting provision though, hasn't escaped critics, even though it was buried somewhere in the bill's 2,074 pages: there's a 5% federal tax for cosmetic procedures (not including surgeries to correct deformities or injuries). Estimated to raise $6 billion the next decade after it begins in January, the tax along with cuts to the federal Medicare system would help Reid’s $848 billion healthcare bill meet two benchmarks set by President Obama—keep the ten-year cost under $900 billion and ensure it doesn’t exacerbate federal budget deficits.
This kind of tax isn't new. New Jersey did it in 2004 but after it only raised $7.5 billion of the estimated $24 billion, they repealed it, then Gov. Corzine vetoed the repeal, and it still only raised $11 million in 2007.
So plastic surgery supporters have been up in arms about this, with several complaints:
1. It's sexist: 86% of patients are female
2. It really doesn't target the rich: According to the American Society for Plastic Surgeons, 30 percent of patients have an annual income of $30,000 or less and 41 percent make between $30,000 and $60,000. Only 13 percent earn at least $90,000.
3. People who get plastic surgeries also don't burden the healthcare system, contribute to ballooning costs of Medicare nor are these procedures covered by insurance. It's far from being a sin tax at all.
Reid’s tax proposal nonetheless put pressure on an industry already concerned about the economic downturn. According to ASAPS, cosmetic procedures plunged 12 percent last year to 10.2 million, compared to a two percent growth the year before.
On Thursday after the proposal was announced, shares of Botox and breast-implant maker Allergan Inc. (AGN) declined 2.3 percent to $58.56 and shares of competitor Medicis Pharmaceutical Corp. (MRX) fell 2% to $23.46.
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