Tax Reform

Republicans Want a Tax Break For Gym Memberships. That's a Terrible Idea.

A new GOP bill would benefit gyms and gym goers, but few others.


Bartek Szewczyk/Westend61 GmbH/Newscom

For decades, Republicans have complained about tax code gimmicks that preference certain types of activity. In the years leading up to the recent tax bill, they often claimed to prefer a simpler, fairer system of taxation with fewer deductions and lower rates. Indeed, some prominent Republicans confidently predicted, the elimination of deductions would allow for lower rates without an overall reduction in federal tax revenue.

In practice, the GOP's preference for a neutral tax code only goes so far. Last year's tax law reduced or eliminated some tax breaks, but not enough to offset the reduced revenue from lower rates. And now some Republicans want to add another carveout: a tax break for gym memberships.

On the merits, it's a weak idea with little supporting evidence. It's a reminder that Republicans can't seem to give up on governing through the tax code.

The bill, which is part of a package of reforms to Health Savings Accounts that has already passed the House Ways and Means Committee, would allow individuals who itemize their taxes to write off as much as $500 a year for gym memberships and fitness classes, along with an additional $250 a year for associated fitness safety expenses, as part of the medical expense deduction. Those totals would be doubled for couples and families, letting some households deduct up to $1,000 a year for gym costs.

The motivation here is to provide an incentive for exercise by providing an incentive for gym memberships. This, in theory, results in healthier people and, consequently, less spending on health care. Healthier people, less spending, and a tax break. Of course Republicans are going to love it. (Remember that time Paul Ryan posed for Time in a backwards baseball cap with a set of weights?)

But as millions of Americans with gym memberships know, having a gym membership is not the same as using it. Studies of fitness programs sponsored by health plans aren't perfectly analogous, but they tend to back up this notion. In one look at individuals who had gym access through their health insurance plans, members averaged just 1.44 visits per week during the first year of the study, and just 1.06 visits during the second year.

That study, along with several others, also found that people who opted into an insurance plan with a gym benefit were more likely to be healthy and active already. And while studies have found that gym benefits are correlated with lower health care spending, the cost to run these programs tends to be larger than the reduction in spending.

A tax break is, of course, not exactly the same as a health insurance benefit, but broadly speaking, we should expect the results to be similar: The benefit will go mostly to healthy people who already pay for gym memberships, and any health care savings will be swamped by the cost of offering the benefit. And while the tax break might, at the margins, encourage more people to join gyms, that doesn't necessarily mean that they will actually exercise more often, especially as time goes on.

Indeed, that is what gym owners are hoping for. The business model for many gyms revolves around the assumption that many members will sign up, keep paying, but use the gym rarely if ever. Hence the sign-up fees and initial contracts, the New Year's specials and packed weekday evenings in January that inevitably dwindle into far less crowded after-work gym floors in March and April. Running a gym is really two businesses: The first is maintaining exercise facilities for use by regulars; the second is finding ways to collect revenue from people who for all practical purposes don't go to the gym.

So it's no surprise that the biggest and clearest beneficiary of a tax deduction like this would be the fitness industry itself: The stock price for gym chain Planet Fitness jumped 4 percent after the bill passed in committee. It's a corporate giveaway in the name of lower taxes and good health.

Granted, as GOP tax follies go, this is relatively minor. The bill in question may not even make it through the Senate, which is still firmly focused on its no-agenda agenda. But it also reveals how accustomed Republicans, who have always been more comfortable with tax code tweaks than with more traditional government programs, are to running inducements for favored activities through tax breaks and deductions, which end up functioning as subsidies by another name.

Republicans may truly dream of a cleaner, simpler tax code. But over time, the allure of targeted tax breaks and the day-to-day realities of interest-group politics could make that dream a bigger lift than the party can manage.

NEXT: Fox News Accidentally Lets Anti-ICE Democrat Speak to President Trump

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. You can exercise in your home, you know. Gyms are for anonymous steam room butt sex, and that is all. Sorry if anyone was unaware of that.

    1. Why do you think the Republicans want a tax break?

      For that matter, why do you think Congress has its own gym?

      1. Indeed. In fact it’s practically rude to go to the gym just to exercise.

        1. I misread your “rude” as “nude,” and was disappointed when I reread it trying to make sense of your sentence.

        2. Anonymous butt sex isn’t exercise? I must be doing it wrong.

          1. A new meaning to sweating with the oldies.

            1. You’re not kidding!

        3. Tony how can it be anonymous when there’s like 10 other fuckers in the room

      2. Remember those stories about Rahm Emanuel? *shudder*

    2. +1 Jazzercise!

    3. My last pay check was $9500 working 12 hours a week online.
      My sisters friend has been averaging 15k for months now and she works about 2o hours a week.
      I can’t believe how easy it was once I tried it out. This is what I do …..>>

      1. Your sister’s friend probably knows how to punctuate properly.

        1. Among other things

  2. Would. She could probably bench press me though.

    1. Snap your backbone like a dried twig.

  3. Hmm. Where could this possibly lead. As noted, this approach will lead to more people signing up and not using their membership. Also, it will lead to gyms raising prices to soak up all that juicy gov’t money being directed towards them. All that’s missing is for some politician to mandate gym memberships. Obviously they can’t do that directly. They’d have to come up with a penalty for not being a gym member. But, we’ll just call that penalty a tax. But, it’s for people’s own good, so really they have nothing to complain about.

    Why does this sound familiar?

    1. Gym access is a human right. Nobody needs more than 23 differently weighted dumbbells.

      1. There should be a law on dumbells. Too many in our society and it gets confusing.

        1. There are still places in the world so poor a single dumbbell is a luxury.

    2. Also, it will lead to gyms raising prices to soak up all that juicy gov’t money being directed towards them.

      I think this is more of a problem with direct subsidies than with tax breaks. After all, tax breaks only have (at best) a maximum-tax-bracket-percentage return on investment, whereas direct subsidies are straight up free cash.

      Or, if a gym membership starts at $300 a year, and I can get 25% of that back in tax write-offs, and the gym raises the fee to $400 a year, I’d end up losing more than I gained if I kept the gym membership.

      But if the Feds were just handing out $200 vouchers redeemable at any gym, then I would absolutely expect the price of a membership to go up to eat that voucher.

      1. Yeah, you will see small price increases, but nothing crazy. You will see more places like Chipotle opening a room with a boss ball that counts as a “gym” and offering a membership.

        This may tie in with the battle to force licensure on CrossFit and Orange theory etc as much as anything else. If tax breaks are being given, the trainers must be licensed.

    1. LOL. But I’d been expecting this might be more appropriate to the occasion.

  4. A new GOP bill would benefit gyms and gym goers, but few others.

    A few others? I think there are many times more people who have gym memberships but are not gym goers than there are actual gym goers.

    1. One chain, Planet Fitness, has actually made that its core business model. Its head and founder is morbidly obese. Its strategy for implementing it is actually rather evil and disgusting, but the only people who realize it are actual gym rats not pudgy whiners so they never get called out by the woke even in today’s society.

      1. Basic Planet Fitness membership is $10 / month, with no contract, That’s hardly the makings of corporate evil

        1. LOL I did not say their price was evil (can there be such a thing?), nor did I say it had anything to do with their ownership structure. I didn’t get into it at all, matter of fact, but I don’t know where you got this nonsense.

          1. You babbled about an “evil and disgusting” business model without elaboration which fits the term nonsense. Every fucking gym in the country knows a lot of the members won’t show up very often.

            PF uses an ugly color scheme and plays shitty music but for 10 bucks a month WGAF. I’ve lost 20 lbs and toned up nicely for an old fuck and for less than a buck a day.

            Agree with the OP but it’s been a couple decades since R’s gave a shit about OPM and it is cheaper than Willie Brown’s fuck buddy’s rent subsidy pipedream on the bright side.

        2. I smell a shill.

  5. I see Aaron Schock has entered the revolving door of Capitol Hill lobbying. Next we’ll be seeing tax breaks for pastel textiles and interior design.

  6. WHICH Republicans ?

    The article is incomplete w/o a list of the guilty .

    1. Tsk. All of them of course. If you are a Republican you are bad.

    2. He doesn’t know. Suderman got the information from the usual dark crevice.

    3. He doesn’t know. Suderman got the information from the usual dark crevice.

  7. Can we talk about how stupid FSAs are as a policy?
    Why should my taxes depend on a plan offered by my employer or not?
    Why should my employer get to keep my funds if I don’t use as much as I estimated during open enrollment?
    Why is the government deciding which expenses count for pre-tax money?
    Why the end of the year, use it or lose it spending?

    1. You need to introduce yourself to HSAs

  8. That study, along with several others, also found that people who opted into an insurance plan with a gym benefit were more likely to be healthy and active already.

    Hell the sole reason insurers OFFER gym membership as a benefit is in order to cherry-pick the healthy and to provide that cherry-pick group what appears to be a benefit that they might value. Esp since employers have to re-offer and re-contract all the plans each year in annual enrollment – and late autumn is a great time for employees to ponder the notion that switching gym memberships for next year might be a way to keep a New Year’s resolution this time.

    All just part of the broken US healthcare system. No surprise the gops will also subsidize the cost for the higher income.

    1. Interesting story, sadly true.
      After I retired, I determined to finally hit the gym regularly for two months, and if that resulted in weight loss to continue, if no weight loss, give it up. As a senior, I got a good deal price of $65/mo, with my wife at $60/mo. Went regularly for two months, small weight loss. At the third month renewal, I discovered that my Medicare supplement HMO now included Silver Sneakers, a kind of old guy universal membership benefit on top of regular Medicare stuff. Turns out that the Gym was a participant in Silver Sneakers, and covered the full cost of membership.
      My attendance has been irregular and spotty ever since. Some of it due to health issues, some of it due to not having to pay separately and being a lazy bum.
      So, yeah, no government breaks.

  9. Why not give the tax break. I mean after all rich people get tax breaks for buying Teslas. Why can’t the middle class get a break when they go to a gym?

  10. Hey man, how about a tax break for everyone?

    Cut the size of government by 98%.

    There, how hard was that?

    Now you can all go home.

    Your job was done by me.

    You’re welcome.

    1. Now we have 53% unemployment, thanks for that.

  11. And now some Republicans want to add another carveout: a tax break for gym memberships.

    So, which is it? Republicans or “some” Republicans? Or maybe it’s just one Republican? Or maybe it’s someone else entirely. Do you not have any idea exactly who is proposing this? If you do, why don’t you say so? If not, how can you claim ANY Republicans are or you just making shit up? This is really sloppy “journalism”.

    1. This is not journalism. It’s not even “journalism”. It’s a poor man’s HalfPo article.

      1. And people still wonder why we make fun of Mr McArdle.

  12. This analysis makes sense only if you think giving some people a tax break prevents lowering taxes for other people. I don’t. I’m for any measure that lets anyone, for whatever reason, keep more of their $. Demoblicans want a tax break for…say no more, I’m for it.

    1. giving anyone a tax break without cutting spending actually means increasing taxes on the future. The ONLY way to reduce taxes on the future is to achieve a surplus FIRST. That’s why all this stuff is completely dishonest. Because spending time buying people’s approval by cutting their taxes also means they will resist the spending cuts – which means they will never need to be proposed either – just like a kid who starts the meal with dessert ain’t gonna eat their broccoli.

      1. So pay for this by eliminating the Department of Education.

    2. People who are induced to sign up for a membership they won’t use as a result of this tax deduction will still end up losing money.

  13. Republicans may truly dream of a cleaner, simpler tax code. But over time, the allure of targeted tax breaks and the day-to-day realities of interest-group politics could make that dream a bigger lift than the party can manage.

    I don’t believe that. Rather, the more groups get a tax break, the more other groups want the same treatment, which is good. Eventually that way everybody will pay less than they would otherwise.

    1. If we all get a tax break doesn’t that mean that nobody gets a tax break?

      1. Yes but at least we’ll equally get no break

        1. We’ll equally get broke?

      2. That is how mr. Incredible would put it.

    2. Eventually that way everybody will pay less than they would otherwise.

      Except the less everyone pays this year, the more they will pay next year – and even more the next year – forever. Best case scenario, we get the under-18’s into full debt slavery while we are busy gorging on the free lunch.

  14. I was working at a bodybuilders’ convention in LA and witnessed several pitches for huzzas and fanfare in support of such legislation. “Tax cut” sounded good to me till they got to the main idea. The main idea was that since gubmint owns us slaves, we’d best be healthy for the greater good.

  15. This a game that both parties play, but the Republicans tend to play it more. The idea is to offer a new *deduction*, but the problem is that it is only worth anything if someone is already itemizing deductions; folks who take the standard deduction don’t get a benefit. The result is that the pols get to claim that they added deductions to allow folks to save taxes, when in reality, there is no savings. of course, this depends on an uncynical electorate that takes it at face-value.

    1. Is your point that tax cuts only benefit people who pay taxes? I agree with you, but what that suggests to me is any amount of socialism is a slope too slippery to start on.

  16. At the constitutional convention, somebody include the phrase that tax deductions can only be removed, never added.

  17. Instead of this the gov’t should pay people for deadlifting and squatting or doing high intensity interval training. We’d save a ton on health care and have a less obese and weak society. Subsidizing memberships in the right to waste time on a treadmill isn’t a great move. Although, the fiscal impact has got to be next to nothing.

    Can I deduct my home gym then? Or do I need to incorporate and have one member?

  18. Well, since it doesn’t seem like there’s any way we’re going to avoid socialized healthcare, there are probably worse things that could happen with that money. I realize that’s adding two wrongs expecting to get a right, which isn t how it works, but at this point I’m not sure even a president Rand paul, even in 2020, would get rid of Obama’s signature achievement. I guess I am guilty of the stereotypical American vice of always wanting more, at least when it comes to medical advances. Thinking that redistributing existing healthcare is the best possible outcome is ignorant of history (probably willfully), and almost certainly wrong. But new inventions pretty much necessitate an enormous amount of waste, and there would be “victims” to put on tv (whereas the damage done by socializing it is in the future – we have no idea what tradeoffs we’re making). That would be such an epically tragic self-fulfilling prophecy (about our healthcare sucking) it’s epic poem material, if anyone still does that.

  19. Sounds like some kind of paranoia, if they do, I just go to the website choose a great triangular and start practicing at home. Then they can’t charge me extra tax!

Please to post comments

Comments are closed.