Can We Tax the Sun Now, Too?

Phase one of the federal health care reform starts today! Those who indulge in a certain activity that could increase the likelihood of cancer will feel the effects on their wallet: tanning salons are now subject to a 10-percent tax that is meant to fund further insurance coverage expansion.

This can be seen as a form of Pigovian tax, which raises the costs of certain activities in order to correct for social costs or negative externalities that are not covered in the market price. In this case though, the externalities of tanning beds are internalized: If I choose to tan, I accept the increased risk that I may get skin cancer. If that were to happen, my insurance company and I would have to pay for the cost of treatment. (And it could be that my insurance company chooses to raise my premium if I indulge in risky behaviors, which is their prerogative.) One could argue that a hypothetical person with tanning bed–induced skin cancer could end up costing others in medical bills, but if that were the issue, the problem would lie in the structure of health care provision, not natural externalities.

What’s next? Should we impose more taxes on roller blades, lest I skin my knee or break my ankle? Or junk food? If we want to really get to the root of what causes skin cancer, shouldn’t we be placing the blame where much of it belongs: the sun? It wouldn’t be the first time someone proposed legislation against the sun.