Cutting Costs?

Written by Neil Levy

We use taxation policy for a variety of ends. Obviously, the primary goal is revenue raising, in order to support government programs. But we also use taxation to send signals and to shape behavior. We tax tobacco and alcohol, for instance, to signal social disapproval of consumption (excessive consumption, in the second case), and to reduce it. There is currently a debate over whether we should implement a sugar tax for the same reasons and also to encourage manufacturers to change the recipes of foods to reduce the amount of sugar they contain. To my knowledge, though, there has been no discussion of taxation of cosmetic surgery (VAT is already charged on cosmetic surgery).

The case for taxing cosmetic surgery is parallel to the case for taxing sugar or tobacco. There are good reasons to disapprove of cosmetic surgery. One doesn’t have to buy the feminist case that cosmetic surgery reinforces repressive standards of beauty (though, of course, it helps) to think that it is morally problematic. There is extensive evidence that for both men and women, physical attractiveness is an asset that leads to success in multiple domains. Since physical attractiveness is not deserved, the benefits it brings are undeserved too. Of course, cosmetic surgery could in principle play a role in equalising attractiveness, but in practice it is available to those who are already better off: the wealthy. It allows the advantaged to accrue further advantage.

It is also wasteful. As it becomes more common, it is subject to a Red Queen effect. Just as the Red Queen in Through the Looking Glass had to run faster and faster to stay in one place, so those who can enhance their appearance find themselves having to expend more and more effort to keep up with others who are doing the same thing. Moreover, the resources it wastes are (in many countries) partially public resources. Though it may be provided and paid for privately, typically the surgeons themselves and the support staff are trained in the public system. Increasing taxation on the elective surgery they perform would offset what is currently, in effect, a subsidy to the welfare. If it reduced demand, it would lead to a better allocation of medical talent, away from cosmetic surgery and toward more socially beneficial branches of medicine.

Of course, some plastic surgery is not truly elective. Some people require reconstructive surgery (after accidents, for instance). Cosmetic surgeons often argue that even surgery that seems elective may not be, because people may suffer psychologically from anxiety about their appearance. In assessing the strength of this argument, we should bear in mind that cosmetic surgery plays a role in sustaining the very system that creates such anxiety (and because justifying cosmetic surgery on these grounds neglects the unfairness stemming from the fact that such surgery is not available to many people). Given that there are however cases in which people experience significant distress from issues related to their appearance, we might allow people to apply for exemptions from the taxation (or even for substantial subsidies) when they are evaluated by independent psychiatrists and found to have a genuine need.

No doubt a large enough tax would see people go offshore for cosmetic surgery to a greater extent than they already do. This may have costs, when people go to worse trained physicians in less well equipped clinics, and suffer complications (often presenting back in their home countries requiring further care). The costs need to be weighed against the benefits, from a reduction in unnecessary surgery, changing social norms and revenue raising.  I suspect the balance of goods and costs supports the imposition of a substantial tax.