Is There a 10 Percent Cosmetic Surgery Tax Coming? July 27, 2009 Kail Padgitt Kail Padgitt Drudge is quoting a CONGRESS DAILY report, which says that lawmakers are interested in raising revenue for health care reform via a “10% excise tax on cosmetic surgery deemed unnecessary for medical purposes.” Good tax policy would argue that such an excise tax would only be imposed if there was truly a negative harm that cosmetic surgery imposes on others in society (i.e. negative externality), not merely a way to raise revenue. Which begs the question…is there a negative externality from cosmetic surgeries? Actually, at first thought, if an attractive appearance provides benefits to others in society that cannot be excluded (i.e. a public good), then maybe there should be a subsidy for cosmetic surgery as opposed to a tax. On the other wrinkle-free hand, if cosmetic surgery is buying a signal that too many people end up buying from social welfare perspective (e.g. like Spence argues with higher education), then maybe a tax would be justified. Stay informed on the tax policies impacting you. Subscribe to get insights from our trusted experts delivered straight to your inbox. Subscribe Share Tweet Share Email Topics Center for Federal Tax Policy Excise Taxes