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Vanity tax would fund stem cell research

Article-Vanity tax would fund stem cell research

Chicago — Life-saving stem cell research is at the center of a proposed 6 percent tax on elective cosmetic surgeries in Illinois, but placing the burden of financing such research solely on potential cosmetic surgery patients is discriminatory, and the bill will ultimately go under-funded, says Jeffrey Poulter, M.D., spokesman for the American Society of Plastic Surgeons (ASPS).

The legislation, drafted by state comptroller Daniel W. Hynes, was unveiled in January and was approved by the Illinois Senate's Health and Human Services Committee on March 17. Referred to by Mr. Hynes as the bill "that will give scientists the 21st century tools needed to cure diseases," SB 2100 would create the Illinois Regenerative Medicine Institute to support stem cell research at Illinois universities and other research facilities throughout the state. The $1 billion general obligation bond issue, if passed by simple majority in the House and Senate, will go before voters in November 2006. Backers say taxing elective cosmetic procedures at 6 percent would fully finance the bonds, which would be issued over 10 years.

Fighting over figures "Our analysis projects that the growth (of cosmetic procedures) will be 19 to 20 percent a year, and we only need 14 percent a year for this tax to be effective in raising adequate funds," says Alan Henry, spokesman for the comptroller's office. "We are very confident that this tax will help meet our goal."

Dr. Poulter, who testified at a recent Illinois state committee hearing, contends that the tax would not begin to generate close to the comptroller's estimate.

"There is no way that Illinois will get $100 million each year from this bill," Dr. Poulter tells Cosmetic Surgery Times. "If you look at New Jersey, all they initially asked for with their tax was $26 million — they ended up getting $6.8 million. Even at 25 percent of what the comptroller has projected, it's still not enough to make this a viable option."

New Jersey has approximately the same number of plastic surgeons as Illinois, with 180 in the Garden State compared to about 190 in Dr. Poulter's state, where he runs the Bloomington Center for Cosmetic and Laser Surgery.

"How is the Illinois tax going to make 19 percent more (than New Jersey) each year? The math doesn't work," he says. "Our state has a budget deficit of $2 billion this year alone — those who pay this tax will first have to cover the state agency that's going to administer it, then they're going to have to cover the bonds that are going to be sold."

Another reason that the numbers may be inaccurate is that patients may travel elsewhere to avoid taxes on their cosmetic procedures. While Mr. Henry says that the comptroller's office factored in some patient fallout, Dr. Poulter predicts that the number of patients who will leave the state will be higher than projected, because cosmetic surgery is a price-sensitive issue.

"St. Louis is just over two hours away from my front door, and Iowa and Wisconsin are easily reachable as well," he says. "It's easy to go elsewhere to avoid a 6 percent tax."

Illinois isn't alone in considering a cosmetic surgery tax as a source of revenue. New Jersey approved its 6 percent tax last year, and the state of Washington is considering a proposed 6.5 percent tax, although no action is expected before the Legislature adjourns later this month. The Texas House recently approved a proposed 7.5 percent tax as part of a plan to overhaul school funding; that measure now goes to the Senate.

Just as in New Jersey and Washington, opponents of the Illinois vanity tax say it would unfairly target middle-income working women who plan and save for their plastic surgery procedures. Ninety percent of these patients make less than $90,000 annually, and 60 percent make between $30,000 and $90,000, according to the ASPS.

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