The Senate wants to put a "botax" on cosmetic surgery. That's a bad idea.

Who's winning, who's losing, and why.
Nov. 23 2009 8:06 PM

Breast Practices

Why taxing cosmetic surgery is a bad idea.

Woman getting botox injection. Click image to expand.
A recently laid-off worker receives a free Botox injection

If Americans were concerned about Congress getting its grubby hands on their Medicare, wait till it touches their breast implants. Among the ways the Senate health care bill pays for itself is a 5 percent tax on elective cosmetic surgery like tummy tucks, face lifts, hair plugs, collagen injections, and any other nonrequired procedures—a proposal known as the "Botax."

Plastic surgeons, like many of their patients, aren't smiling. Industry groups like the American Society for Aesthetic Plastic Surgery and the American Society of Plastic Surgeons have launched campaigns against the tax, arguing not only that it would hurt business during a recession—elective surgeries are down already—but that it doesn't target the high rollers Congress is aiming for. Furthermore, says Big Knife, taxing cosmetic surgery could sag the economy as a whole, just when it needs a lift most. (The tax would raise an estimated $6 billion.)

The tax seems like an easy populist sell. One imagines the main clientele of plastic surgeons as the cast of the Real Housewives of New Jersey. But the tax isn't as progressive as it sounds, say surgeons. According to a 2005 survey by the ASPS, one-third of people who get plastic surgery make less than $30,000 a year, 70 percent of clients make less than $60,000, 86 percent make less than $90,000, and only 13 percent make more than $90,000. (Of course, that survey was based on people planning to get elective surgery, not those who actually got it.) Indeed, cosmetic surgery is an industry supported largely by people who can't afford it—a full 85 percent of operations are paid for using credit, according to Middlebury sociology professor Laurie Essig. As a result, the tax would hit low-income consumers especially hard.

But the argument isn't just that taxing plastic surgery is bad for the economy. It's also that plastic surgery itself is good for the economy. Call it a … (rimshot, please) stimulus package.

It's well established that attractive people have relatively high incomes. A 2005 study by the Federal Reserve of St. Louis found that good-looking people make about 5 percent more money than their average-looking counterparts, who in turn make 9 percent more than people with below-average looks. Daniel Hamermesh, an economics professor at the University of Texas at Austin, found similar results in a new study.

Assuming that cosmetic surgery on the whole improves one's physical appearance, which in turn correlates with higher income, it's not a stretch to conclude that going under the knife could make individual Americans better off, says Gordon Patzer, author of Looks: Why They Matter More Than You Ever Imagined. "Cosmetic surgery makes you more attractive, and it also increases self esteem, confidence, and persuasiveness," all of which make you a more productive and valuable employee, says Patzer.

Unfortunately—or maybe fortunately, for surgeons—numbers are hard to come by. No one really measures income levels before and after plastic surgery. But surgeons say there's plenty of anecdotal evidence to suggest that a larger cup size (or smoother nasal curvature or tighter buttocks) leads to a higher tax bracket. "People come to us between jobs or after losing their jobs to freshen up, look fresh, look alert—to be or at least feel more competitive, which makes them more competitive," says Steven Hopping, past president of the American Academy of Cosmetic Surgery who now runs the Center for Cosmetic Surgery in Washington. Renato Saltz, president of the ASAPS, says he sees job improvements all the time: "A lot of these women are in their early 30s, have lost their self esteem, lost their spouse, they feel very insecure, they come in, have these procedures, and they immediately start losing weight, exercising, they are very proactive, many go back and get a job and become functional in society."

Hamermesh, who conducted the most-cited study on beauty and income, disagrees. Yes, his survey found that beauty does lead to higher wages. But he also says that attempts to improve one's attractiveness, whether with clothing, Brylcreem, or surgical intervention, make no difference when it comes to income. The reason, he says, is that people can tell the difference between natural beauty and artificial beauty. If you had a convincing facial overhaul, like John Travolta in Face/Off, you might get a raise. Otherwise, probably not.

Hamermesh also disputes the notion that better looks lead to better productivity: "Are they truly more productive, or just being favored relative to somebody else?" Of course, if the surgeons are right that nips and tucks boost confidence, perhaps their patients will become more productive. After all, Hamermesh's own research found that good-looking executives bring in about 10 percent in extra sales relative to their average-looking colleagues.

Big Knife would add that the only plan to tax cosmetic surgery so far, in New Jersey, has been a failure, costing $3 in administrative spending for every dollar of revenue. The main problem, apparently, has been the difficulty in defining "elective" versus "reconstructive" surgery. Who decides whether an operation to fix your nasal breathing, which also happens to make your nose look straighter, is functional or aesthetic?

If Congress really wants to learn about the economics of cosmetic surgery, they should commission a study. If it turns out there's no connection between surgery and increased productivity, the case for a tax might be slightly stronger. But if there is a connection, then taxing cosmetic surgery could turn out to be like the surgery itself: a superficial fix for a deeper problem.

Christopher Beam is a writer living in Beijing.

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