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

25 Pages Posted: 7 Dec 2006 Last revised: 3 May 2007

See all articles by John F. Cogan

John F. Cogan

Stanford University - The Hoover Institution on War, Revolution and Peace; National Bureau of Economic Research (NBER)

R. Glenn Hubbard

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER)

Daniel P. Kessler

Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

Date Written: December 2006

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.

Suggested Citation

Cogan, John F. and Hubbard, Robert Glenn and Kessler, Daniel Philip, Evaluating Effects of Tax Preferences on Health Care Spending and Federal Revenues (December 2006). NBER Working Paper No. w12733. Available at SSRN: https://ssrn.com/abstract=948646

John F. Cogan

Stanford University - The Hoover Institution on War, Revolution and Peace ( email )

HHMB Rm 347
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(650) 723-2585 (Phone)

National Bureau of Economic Research (NBER)

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Robert Glenn Hubbard (Contact Author)

Columbia Business School - Finance and Economics ( email )

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New York, NY 10027
United States

HOME PAGE: http://www.gsb.columbia.edu/faculty/ghubbard

National Bureau of Economic Research (NBER)

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Daniel Philip Kessler

Stanford Graduate School of Business ( email )

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Stanford, CA 94305-5015
United States
650-723-4492 (Phone)
650-725-6152 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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