The Tax Foundation released a Special Report Friday looking at the total economic cost of higher tax rates after the expiration of the 2001 and 2003 tax cuts and factoring in a proposed surtax on the rich to pay for health care reform. The federal government expects to raise $88 billion in 2011 from the higher rates, but the economy will incur a “deadweight loss” of $76 billion, raising the total cost of the tax increases to $164 billion – nearly double what lawmakers intend to raise. In the following Tax Foundation video, Senior Economist Gerald Prante further explains the deadweight loss – or “excess burden” – of a tax. Be sure to subscribe to the Tax Foundation’s YouTube Channel.
