14 July 2007

If you're going to lie with numbers, at least be subtle about it

Mark C. Chu-Carroll at Good Math, Bad Math comments on A Laughable Laffer Curve from the WSJ.

In economics there is the Laffer curve, which posits that increasing tax rates increases government revenue up to a certain tax rate, after which increasing taxes actually decreases revenue because it discourages people from producing wealth. A lot of macroeconomics is devoted to determining what the Laffer curve looks like, in order to argue that taxes should be raised/lowered. Chu-Carroll explains it better than I can; you should read his post.

The Wall Street Journal is far to the right economically, and shows this by drawing a "curve" fit to a bunch of points that is clearly contrived to make it look like lowering corporate taxes in the US is a Good Idea. I know that I don't know enough economics to comment. But I do know that the WSJ could have been a little more subtle.

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