Something I finally agree with. Those self conscious like Michael Jackson who try to look like something God never intended.

Face-lifts, tummy tucks and hair transplants could be hit with a new tax to help finance the trillion-dollar healthcare overhaul plan, according to sources familiar with the Senate talks.

The Senate Finance Committee has discussed imposing a 10 percent excise tax on cosmetic surgery deemed unnecessary for medical purposes. The idea was broached in a meeting with OMB Director Orszag in mid-July, after which Senate Finance Chairman Max Baucus told reporters he had heard some "interesting," "creative," and "kind of fun" ideas.

The tax, which has not been officially scored, would plug some of the revenue gap senators are seeking to fill to keep on schedule for a markup the week of Aug. 3. It would target procedures prohibited under Section 213 of the tax code, which deals with itemized deductions for medical expenses not covered by health insurance.

The 1990 deficit-reduction law prohibited taxpayers from taking deductions for cosmetic surgery "unless the surgery or procedure is necessary to ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease."

The law defines cosmetic surgery as "any procedure which is directed at improving the patient's appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease."

According to the IRS, deductions for procedures such as reconstructive surgery due to cancer or laser eye surgery would be allowed. But nose jobs, liposuction, teeth-whitening procedures and Botox injections to smooth wrinkles would be prohibited under Sec. 213 and subject to the new tax.

A number of states have tried to impose excise taxes on cosmetic surgery, with little success. The only state with such a law on the books is New Jersey. Democratic Gov. Jon Corzine vetoed a bill to repeal the state's 6 percent tax on cosmetic surgery gross receipts in 2007, even after the repeal passed unanimously in both the state Assembly and Senate.

Malcolm Roth, vice president for health policy and advocacy at the American Society of Plastic Surgeons, said the New Jersey tax has only brought in about 25 percent of anticipated revenue since it was enacted in 2004 and imposes "another bureaucratic layer," including questions of how to determine what procedures are eligible. Roth said lawmakers at the federal level could expect the same administrative headaches and lack of anticipated revenues if they went down the New Jersey route.

The itemized deduction, for example, has been the subject of litigation in federal tax court. In a 2001 case, a nurse was awarded the deduction for surgery to remove an overhanging skin mass after the IRS initially denied her claim. The court agreed that the mass, which formed after the woman lost 100 pounds, was prone to infection and interfering with her hospital work.

Roth, a plastic surgeon at Maimonides Medical Center in Brooklyn, N.Y., said it "would be a discriminatory tax against women," noting that 86 percent of patients are female and 91 percent are of working age between 19 and 64.

He also disputed the notion it would be a "tax on the wealthy," noting most patients earn less than $100,000 a year. "People put money aside for years, sometimes weekly under-the-mattress deductions" to get the surgery they want, he said.

by Peter Cohn

http://www.nationaljournal.com/congress ... 7_8213.php