Lined tote bag?

[http://users.livejournal.com/_miss_fish_/]

Sorry, this is text only... Alright, I have a problem. I'm making the lined tote bag from ohmystars.net, but I want it deeper than 1". When I cut the little squares in the corner, I plan on cutting them 3"x3" to make it 3" in depth. However, if I do this, will I lose 3" in HEIGHT from my bag? Like, if it was supposed to be 9" tall, would it shrink to 6" by doing this? Any help is appreciated, thanks.