Joseph Cryan: Learn from my mistakes and strip the cosmetic tax provision from the health care reform bill | Commentary | -- Your State. Your News.

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Joseph Cryan: Learn from my mistakes and strip the cosmetic tax provision from the health care reform bill

cryan122209_optBY JOSEPH CRYAN

American taxpayers are well advised to pay close attention to recent history as they take in various media reports interpreting the Senate Health Reform Bill unveiled by Senate Democrats this week. If some of the surprise provisions of the bill remain, and it is passed, Americans will learn a lesson in financing that the state of New Jersey learned the hard way: Creatively taxing the public to raise revenue for other health care expenses does not work.

Consider, the surprise addition to the 2,074-page bill calling for a new 5 percent tax on elective cosmetic medical procedures to supposedly generate $5.8 billion over the next 10 years to help fund the $849 billion dollar Senate plan. As a Democratic New Jersey Assemblyman, I sponsored legislation in 2004 which created a 6 percent tax on cosmetic medical procedures in New Jersey. The tax was a "creative" approach, we thought, to raising an estimated $24-million annually to help fund "charity care" for indigent and uninsured patients.

There was little debate and conversation before the bill was passed. This was an untested revenue stream that ultimately failed. Overall, the tax has been expensive to administer and generated only minimal income. Instead of the projected $24 million annually, the New Jersey Division of Taxation estimates collections of less than $9 million — a 62 percent shortfall. Independent studies have proven, that, after two years, for every $1.00 collected in cosmetic tax, the state has LOST $3.39 in total state revenue.

When the tax idea came up late in the 2004 budget debate, one of the few points made was that these services were performed on wealthy women, who could easily foot the bill for the additional tax. In reality, 86 percent of plastic surgery patients are working women. In 2005, the American Society of Plastic Surgeons conducted a survey of people planning to have cosmetic surgery within the next two years. Sixty percent of respondents reported an annual household income of $30,000-$90,000 a year. Most importantly, 40 percent of those reported a household income of only $30,000-$60,000. Only 10 percent of respondents reported a household income of over $90,000, which clearly refutes the suggestion that elective surgery taxes are "luxury" or "sin" taxes affecting a privileged few.

New Jersey was the first state in the union to pass a tax on cosmetic medical procedures. Since then, at least eight other states have considered similar legislation and rejected it.

As a democratic member of the New Jersey General Assembly, I urge Senate Majority Leader Harry Reid, D-Nev., to learn from my mistake in New Jersey and strip the cosmetic tax provision from the health reform bill. Creative taxation on cosmetic medical procedures to help finance health reform is a costly mistake that America can't afford to make.

Joseph P. Cryan has served as Chairman of the New Jersey Democratic State Committee since February of 2006. Chairman Cryan was unanimously confirmed for this position following the nomination of Jon S. Corzine as governor. Cryan previously served as vice chair for a period of four years during which Democrats saw gains every year in the number of offices won across New Jersey. Cryan began his involvement in Democratic politics at the Union Township Democratic Municipal Organization where he served as chair from 1998 until present. Cryan also represents the 20th Legislative District in the General Assembly of New Jersey. He serves as Assistant Majority Leader, chair of the Education Committee and as a member of the Assembly Budget Committee. Cryan is an undersheriff for Union County's Sheriff's Office.

Comments (3)
3 Thursday, 09 December 2010 15:50
UNION Farmer
What this little man from my Union fails to understand is that cosmetic surgery falls into many categories, for instance a man who might have been burned across his body in a homefire may need plastic and reconstructive surgery for various medical procedures, which does fall under cosmetic surgery...The real article that Mr. Cry baby should write about is how " How to get rich off the system, the man has 4 pensions coming to his name, he is undersheriff of a town that already has a police director in place, this man is a leach and has been eating off of taxpayers for decades...
2 Tuesday, 22 December 2009 14:36
Hey Assemblyman Cryan,

How much did various plastic surgery interest groups contribute to your campaign in return for that little piece of propaganda?

Do your statistics suggest that people stopped getting elective plastic surgery because of that tax? I simply find that very hard to believe. And your claim that the state lost $2.39 for every dollar of tax collected does not say anything about this specific tax. What it says is that the NJ Division of Taxation had some serious inefficiencies.

Even if all of your dubious tax claims are correct, it is still the case that elective plastic surgery is a burden on our medical system. It diverts potentially talented doctors to lucrative, yet frivolous, careers. And the source of the demand for the services of these doctors is nothing other than old-fashioned vanity. If a small tax can discourage the exercise of this vice even slightly, then the tax conveys a social good.
1 Tuesday, 22 December 2009 13:36
Robert Sedgewick
My hat is off to Joe Cryan for admitting his made an error with some bad legislation and is now working to make amends for it. I appreciate the Assemblyman's words, effort and service to New Jersey.

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