Do you think the Tan Tax is bad? Well there’s an even bigger crisis brewing, and it will likely affect salon owners in a major way. The problem centers on America’s economy, and the shape it will be in when President Obama leaves office in 2016. That’s the big picture, anyway, and it’s one of which tanning salon owners need to be aware. Why? Because Federal lawmakers have already saddled salon owners and their tanners with a 10-percent tax on every tanning session – a move designed to help pay for the Affordable Care Act, aka “Obamacare.” With the U.S. falling deeper and deeper into debt, and the costs for ACA skyrocketing above and beyond what small amount has been collected from tanning salons, it’s not unreasonable for members of this industry to be concerned about even higher taxes in the near future.
What this industry needs to do is follow the example set by the Indoor Tanning Association’s Board of Directors, to get politically involved!
Political involvement is exactly what a small group of ITA Board members and tanning industry leaders recently accomplished. Santo Carollo (Devoted Creations), Lewis Henry (Devoted Creations) and Ed Jerger (Four Seasons Sales & Service) attended a fundraiser for Senate Minority Leader Mitch McConnell (R-KY). The trip was made possible by Spencer A. Coates, President of Houchens Industries, Inc. – the 18,000-strong, employee-owned conglomerate to which Four Seasons belongs – which is based in Kentucky. Jeff Sherman, Devoted Creations’ in-house counsel, also attended the event, which was held May 10 at the Club at Olde Stone in Bowling Green, KY. This group of politically astute tanning industry leaders made good use of the opportunity to donate to McConnell’s campaign and meet with the Senate leader, as well as Sen. Rand Paul (R-KY) and Rep. Brett Guthrie (R-KY). They also left the event with what might be considered a chilling forecast for America’s economy, and what tanning professionals need to do to protect themselves and the industry from its effects.
Good to see You!
A fundraiser for Senator Mitch McConnell is important to the indoor tanning industry for many reasons, the first being that McConnell is the Senate Republican Leader. John Overstreet, ITA Executive Director explains, “As the minority leader in the Senate, McConnell is first in line to become the leader in the Senate should the Republicans become the majority. It’s a very powerful position, and Senator McConnell would have a tremendous amount of say in the Senate’s legislative priorities during his term.”
McConnell, who has a positive and longstanding history with the indoor tanning industry, was pleased to see the ITA Board members who attended the event. “A few years ago,” Overstreet said, “Mitch McConnell attended the ITA’s fundraiser for the National Republican Senatorial Committee, held in Nashville. He also hosted a special luncheon for the fundraiser’s biggest contributors, and was very gracious and understanding to our industry’s needs. To say that he’s a champion of small business and economic opportunity would be the understatement of the year.”
A Lesson in Macro…
For the tanning industry veterans who attended, the fundraiser provided an excellent study in macroeconomics. The term is used to refer to the study of the economics of whole systems, particularly referring to general levels of output and income, and how different sectors of the economy interrelate. Houchens Industries President Spencer Coates was affected by the lesson in macroeconomics provided at the fundraiser, and he believes every salon owner should take heed of the numbers that were provided.
“The U.S. Government is over $17 trillion dollars in debt,” Spencer explained, “and much of it to foreign countries. It will be $20 trillion by the time President Obama leaves office. In addition, the government has unfunded obligations for entitlement programs, such as social security, Medicare, and Medicaid, totaling $90 trillion.” McConnell shared numbers from the tax increases on the wealthy, which went into effect on January 1, 2013, as well as the additional taxes that Obama wanted to enact, and compared them to the $2.6 trillion dollars per year in taxes the Government collects. “Not including the massive debt owed states and municipalities or the costs of the Affordable Care Act, the Government has made promises to future retirees for social security and health care that cannot possibly be paid; even if you took every dollar the wealthiest Americans made.”
…and Microeconomics
When given the “big picture” of America’s economy, it’s important to see how that will affect how business is done at the individual level, such as the interaction between suppliers and consumers. This study, referred to as “microeconomics,” focuses on the economic behavior of individual consumers, companies and industries, and analyzes the market and other mechanisms that establish relative prices among goods and services. Ed Jerger, Four Seasons’ Executive Chairman, applied information provided at the fundraiser to the microeconomic factors directly affecting tanning salon owners across the country, and it paints a chilling forecast to for tanning professionals.
“Many salon owners were upset when the government enacted the Tan Tax as a way to help fund the Affordable Care Act,” Jerger explained, “but things are likely to get worse in the near future. The debt the government has accrued will not just disappear; it will have to be paid one day, and the current tax structure that’s in place is clearly not enough.” Ed’s solution is for more salon owners to join the ITA and become involved in local, state and national-level politics. This, he says, is the only way for lawmakers to know what the indoor tanning industry is all about. “Much of what they hear about comes from those who stand against us,” he added, “and this dynamic needs to be changed.”
Powerful Conversations
The fundraiser was a great opportunity for industry veterans to flex their political muscles. While Ed Jerger got to spend some time talking with Mitch McConnell, Rand Paul and Rep. Brett Guthrie (R-KY), his conversation with McConnell’s wife, Elaine L. Chao, was particularly illuminating. “I was very pleased to discover that she was an immigrant to the United States,” Jerger said, “which is something we have in common.” Elaine told Ed how she came to America from Taiwan, and about her eventual appointment as 24th United States Secretary of Labor in the Cabinet of President George W. Bush from 2001 to 2009; Ed shared his story of coming to America in 1983 at the age of 28 with nothing but a suitcase and about 800 Deutschmarks to his name. “We both believe in the American Dream,” Ed added, “but we’re concerned whether America can continue to provide these opportunities.”
Lewis Henry and Santo Carollo, both of Devoted Creations, involved themselves in lively discussion with McConnell, Paul and Guthrie, and the two took much away from the event. Of his experience and its political implications, Santo said, “It’s extremely important to support events such as these and have face-time to communicate our industry’s issues. It confirms that repetitiveness is key to making progress in Washington. Senators and Congressmen are now very familiar with our industry’s concerns and remember discussions from past functions.” Lewis echoed Santo’s thoughts, referring to the fundraiser as great opportunity to make one’s voice heard. He also said, “Supporting great events such as this give our industry presence in Washington while allowing us to talk about future and present problems we face. I wish more people in our industry could see what we are accomplishing by being an active participant at these functions.” Both Santo and Lewis thanked Houchens Industries and Spencer Coates for providing them the opportunity to attend the event.
Get Involved!
Members of the ITA Board attending McConnell’s fundraiser is a good example of the gains that can be made when tanning professionals become politically active, but salon owners need to do it, too. “We encourage involvement in local and state-level politics,” said John Overstreet. “This allows them to become acquainted with their elected officials and gives them the opportunity to educate these politicians about how the laws they create affect small business.” As always, Overstreet urges salon owners to contact the ITA regarding becoming members as well as to learn more about ways they can get politically involved in their communities and states.
The ITA Board is preparing for what could be its biggest act of political involvement for 2014. Members are considering the possibility of hosting another Industry Summit in Washington, D.C.; the event matches tanning industry professionals with Federally-elected officials from their home states. This gives our industry the opportunity to educate their representatives about the indoor tanning industry and how legislation affects those who earn their living in it. “Our first summit was held in May 2011 and it was very successful,” said John Overstreet. “We hosted one again in May 2013 and even more industry professionals took part in the event.”
The ITA Board is discussing the possibility of putting one together this year, most likely when Congress returns to session in the fall. Keep reading IST Magazine for more details, and all other news involving the Indoor Tanning Association and its ongoing efforts to protect everyone’s right to tan.
