Obamacare Tax Hikes Literally Killing Small Business Owners

Moneybox
A blog about business and economics.
Nov. 14 2012 9:15 AM

Obamacare Tax Hikes Literally Killing Small Business Owners

A Key West man who told his partner that "if Barack gets re-elected, I'm not going to be around" was found dead on Nov. 8, with the words "F--- Obama!" scrawled on his will and two empty prescription bottles nearby.
Henry Hamilton, 64, owner of Tropical Tan off Duval Street, was "very upset about the election results," his partner Michael Cossey told Police Officer Anna Dykes.
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Obviously people don't really kill themselves over adverse political outcomes. But it should be said that owners of tanning salons have a uniquely legitimate beef with the Affordable Care Act which includes a 10 percent excise tax on indoor tanning operations as one of its revenue provisions.

I don't think there's any particularly good reason for this to be in there. As health care policy, more aggressive implementation of the excise tax on expensive health insurance plans or more aggressive implementation of IPAB would make more sense. As public health policy, a modest increase in alcoholic beverage taxes would make a lot more sense and almost certainly raise more revenue anyway. The tanning tax is also an implementation nightmare since, as Sarah Kliff has written, tanning services are often sold as part of a larger bundle—a throw-in with your gym membership, for example. Since bundles tans can evade the tax and there's a high degree of substitutability between bundled and non-bundled tanning services, the tax ends up being incredibly burdensome on owners of standalone salons. On the pro side, throwing this provision into the law was a fun way to tweak John Boehner. But at the end of the day that's not a very compelling rationalization.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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