Study Calculates Economic Cost of Higher Tax Rates, Health Care Surtax
August 14, 2009
The actual economic costs of the proposed health care surtax and the expiration of the 2001 and 2003 tax cuts will be twice the amount of revenue the government intends to collect. According to a new analysis from the Tax Foundation, the higher tax rates are estimated to raise $88 billion in 2011, but the economy will incur an additional burden of $76 billion—or “deadweight loss”—as a result, which raises the total cost of the tax increases to $164 billion, roughly double what lawmakers intend to raise.
Read the in-depth Tax Foundation Special Report “The Excess Burden of Taxes and the Economic Cost of High Tax Rates” or the shorter Tax Foundation Fiscal Fact based on the same data, “Towards Understanding the Full Burden of High Tax Rates.”