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Evaluating Effects of Tax Preferences on Health Care Spending and Federal Revenues

In: Tax Policy and the Economy, Volume 21

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  • John F. Cogan
  • R. Glenn Hubbard
  • Daniel P. Kessler

Abstract

In this paper, we calculate the consequences for health spending and federal revenues of an above-the-line deduction for out-of-pocket health spending. We show how the response of spending to this expansion in the tax preference can be specified as a function of a small number of behavioral parameters that have been estimated in the existing literature. We compare our estimates to those from other researchers. And, we use our analysis to derive some implications for tax policy toward HSAs.
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Suggested Citation

  • John F. Cogan & R. Glenn Hubbard & Daniel P. Kessler, 2007. "Evaluating Effects of Tax Preferences on Health Care Spending and Federal Revenues," NBER Chapters, in: Tax Policy and the Economy, Volume 21, pages 65-82, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:0047
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    References listed on IDEAS

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    1. David M. Cutler, 1994. "A Guide to Health Care Reform," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 13-29, Summer.
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    Cited by:

    1. Joseph Bankman & John Cogan & R. Glenn Hubbard & Daniel P. Kessler, 2012. "Reforming the Tax Preference for Employer Health Insurance," NBER Chapters, in: Tax Policy and the Economy, Volume 26, pages 43-58, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • I1 - Health, Education, and Welfare - - Health

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