Tyler Cowen cites Marty Feldstein to explain why it is worse than you think:
[F]inancing additional government spending by an across the board rise in all marginal tax rates would make the cost per dollar of government spending equal to $1.76.These two facts — that the actual revenue is only 57 percent of the static gain and that the deadweight loss is 76 cents per dollar of revenue — should be central to any consideration of tax policy. And yet they are not.
Cowen adds to that:
What is talked about even less is that most government programs are, for better or worse, irreversible investments. They don’t fade away very easily, even if they have been proven ineffective or harmful. Do you really think that the Departments of Energy and Education have to pass a market test every year? In fact government programs, on average, grow almost automatically.Do you know the literature on irreversible investment and option value? Under plausible parameter specifications, you need a benefit-cost ratio of 3 to 1 or more before it makes sense to proceed with the irreversible investment. Otherwise it is better simply to wait. That’s not 1.3 to 1, that’s 3 to 1.