Revenue Losses to State and Federal Government From Opioid-related Employment Reductions

Research output: Contribution to journalArticle

Abstract

Objective: The main purpose of this study was to estimate the tax revenue lost by state and federal governments as a result of adverse labor market outcomes attributable to opioid misuse. Methods: We pair existing, plausibly causal estimates of the effect of opioid misuse on the decline in the labor force from 2000 to 2016 with a variety of data sources to compute tax revenues lost by state and federal governments using the online TAXSIM calculator. Results: We find that between 2000 and 2016, opioid misuse cost state governments $11.8 billion, including $1.7 billion in lost sales tax revenue and $10.1 billion in lost income tax revenue. In addition, the federal government lost $26.0 billion in income tax revenue. Conclusions: By omitting lost tax revenue due to labor force exits, prior studies have missed an important component of opioid-related costs borne by state and federal governments. Policy Implications: As more states and the federal government contemplate litigation for opioid-related damages, lost tax revenue represents an important cost that could be recouped and allocated to opioid prevention and treatment programs.

Original languageEnglish (US)
Pages (from-to)494-497
Number of pages4
JournalMedical care
Volume57
Issue number7
DOIs
StatePublished - Jul 1 2019

Fingerprint

State Government
Federal Government
Taxes
Opioid Analgesics
Income Tax
Costs and Cost Analysis
Information Storage and Retrieval
Jurisprudence

All Science Journal Classification (ASJC) codes

  • Public Health, Environmental and Occupational Health

Cite this

@article{fc075da406a34218aa13b6fc35b62868,
title = "Revenue Losses to State and Federal Government From Opioid-related Employment Reductions",
abstract = "Objective: The main purpose of this study was to estimate the tax revenue lost by state and federal governments as a result of adverse labor market outcomes attributable to opioid misuse. Methods: We pair existing, plausibly causal estimates of the effect of opioid misuse on the decline in the labor force from 2000 to 2016 with a variety of data sources to compute tax revenues lost by state and federal governments using the online TAXSIM calculator. Results: We find that between 2000 and 2016, opioid misuse cost state governments $11.8 billion, including $1.7 billion in lost sales tax revenue and $10.1 billion in lost income tax revenue. In addition, the federal government lost $26.0 billion in income tax revenue. Conclusions: By omitting lost tax revenue due to labor force exits, prior studies have missed an important component of opioid-related costs borne by state and federal governments. Policy Implications: As more states and the federal government contemplate litigation for opioid-related damages, lost tax revenue represents an important cost that could be recouped and allocated to opioid prevention and treatment programs.",
author = "Segel, {Joel E.} and Yunfeng Shi and Moran, {John R.} and Scanlon, {Dennis P.}",
year = "2019",
month = "7",
day = "1",
doi = "10.1097/MLR.0000000000001107",
language = "English (US)",
volume = "57",
pages = "494--497",
journal = "Medical Care",
issn = "0025-7079",
publisher = "Lippincott Williams and Wilkins",
number = "7",

}

TY - JOUR

T1 - Revenue Losses to State and Federal Government From Opioid-related Employment Reductions

AU - Segel, Joel E.

AU - Shi, Yunfeng

AU - Moran, John R.

AU - Scanlon, Dennis P.

PY - 2019/7/1

Y1 - 2019/7/1

N2 - Objective: The main purpose of this study was to estimate the tax revenue lost by state and federal governments as a result of adverse labor market outcomes attributable to opioid misuse. Methods: We pair existing, plausibly causal estimates of the effect of opioid misuse on the decline in the labor force from 2000 to 2016 with a variety of data sources to compute tax revenues lost by state and federal governments using the online TAXSIM calculator. Results: We find that between 2000 and 2016, opioid misuse cost state governments $11.8 billion, including $1.7 billion in lost sales tax revenue and $10.1 billion in lost income tax revenue. In addition, the federal government lost $26.0 billion in income tax revenue. Conclusions: By omitting lost tax revenue due to labor force exits, prior studies have missed an important component of opioid-related costs borne by state and federal governments. Policy Implications: As more states and the federal government contemplate litigation for opioid-related damages, lost tax revenue represents an important cost that could be recouped and allocated to opioid prevention and treatment programs.

AB - Objective: The main purpose of this study was to estimate the tax revenue lost by state and federal governments as a result of adverse labor market outcomes attributable to opioid misuse. Methods: We pair existing, plausibly causal estimates of the effect of opioid misuse on the decline in the labor force from 2000 to 2016 with a variety of data sources to compute tax revenues lost by state and federal governments using the online TAXSIM calculator. Results: We find that between 2000 and 2016, opioid misuse cost state governments $11.8 billion, including $1.7 billion in lost sales tax revenue and $10.1 billion in lost income tax revenue. In addition, the federal government lost $26.0 billion in income tax revenue. Conclusions: By omitting lost tax revenue due to labor force exits, prior studies have missed an important component of opioid-related costs borne by state and federal governments. Policy Implications: As more states and the federal government contemplate litigation for opioid-related damages, lost tax revenue represents an important cost that could be recouped and allocated to opioid prevention and treatment programs.

UR - http://www.scopus.com/inward/record.url?scp=85062848551&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85062848551&partnerID=8YFLogxK

U2 - 10.1097/MLR.0000000000001107

DO - 10.1097/MLR.0000000000001107

M3 - Article

C2 - 30844906

AN - SCOPUS:85062848551

VL - 57

SP - 494

EP - 497

JO - Medical Care

JF - Medical Care

SN - 0025-7079

IS - 7

ER -