The proposed $50,000 and $100,000 penalties on employers will lose revenue to the Treasury rather than increase revenue. This is because employers will become less productive, or move offshore, or hire fewer workers, or have lower profits to be taxed–or some combination of the above. The loss in Federal, State, and Social Security tax revenue outweighs the gain from the penalties.
Read the full paper by Diana Furchtgott-Roth here.
