In science, outliers are often easy to dismiss as measurement error, equipment etc. But how can you ignore a REAL country with REAL people?

so you reply well they’ve got oil etc. so we just can. so what about all the other countries with oil or special ‘resources’ or exceptional state of affairs?

read here for more:
http://crookedtimber.org/2007/07/14/outliers/

m

Great job! It seems that someone actually wanted to discredit Laffer curve and could not find a better way to do it than manipulating these data.

Who’s worst? Economists doing science or scientist doing business? I wonder

“Did anyone bother to look up the fact that this line is not being fit to the data?”

It’s just there for decoration?

“It is merely a curve which indicates ‘good’ ratios are below the curve and ‘bad’ ratios are outiside the curve.”

Um, could you repeat that, in a way which makes more sense?

The higher the tax rate, the greater the incentive to plan your taxes carefully. Even for whatever companies would remain under a 100% regime, presumably few accounts would show a net profit, and even fewer a substantial one.

The point is that the AEI/WSJ curve was laughably ridiculous. A decent supply-sider could argue “Wow, that particular curve is egregiously bad, and they should be embarrassed; but a better analysis, with more appropriate data, would nevertheless show a turnover.” Such a person, whether right or wrong, would be “honest.” The actual people who seem to be showing up here are choosing instead to ignore the ridiculousness of the published curve (the point of this post), and to make fun of straw men that they are choosing to construct. That’s what we call a “hack.”

I was going to write some cogent argument pointing out that Economics is viewed as the dismal science, not because its practioners are charlatans, but because it is so hard. First principles are a little tricky to pin down… But in the light of this sort of ‘analysis’ (the graph) I probably better not bother.

I’m not quite convinced by Brian’s (39) argument that business would continue under a 100% tax regime. I can’t imagine many of them would bother…

I supose that every field has it’s unfair share of contributions from people with little knowledge of the subject but a powerful urge to talk about it anyway. Physicists and astronomers have IDer’s, nutjobs with perpetual motion machines and economists have everyone that knows the world would be a better place if everyone was more left/right wing.

I’m glad I’m a software engineer. Everyone likes us. Or something.

Good point. Way too many people fall prey to the fallacy of reversal, where an argument with some flaw is assumed to have no merit at all. They sometimes apply this to “crank” ideas. In this case, I agree that the really important thing (for our understanding, but it is still important to flag bad presentations) is not the hokey high-peaked curve, but the rough clustering between 15-35% rates, which could thus ideally be considered a “reasonable range” for liberal democracies that want to raise “adequate” revenue without oppressing business. However, the real trick here is that so many companies pay less, or are even given net payments, due to loopholes and lobbied rigging of the tax code. The percent figures, as a practical matter, are therefore dubious to begin with.

Interestingly, the data suggest that my own country, the UK, needs to focus not on changing tax rates (which look like they’re just under the peak) but on improving tax-collection efficiency (which moves us up towards the peak without sacrificing significant portions of domestic product).

The danger of producing such rotten arguments in favour of your position is that people spot them as such, and mistake “bad argument” for “no argument”. They then conclude that your position is fundamentally flawed, and you succeed in winning critical thinkers for the opposition.

*ahem*

Obviously the graph will hit zero at some point of taxation (because obviously at a tax rate of 101% the graph will hit zero within a year or so). And clearly 0% tax generates 0% GDP income from tax.

So the curve CANNOT be linear. It has to be at least second degree. Or third. Dunno what will fit best. But it seems to me the economist is much closer on the money than you are.

And btw, I’m a mathematician.

thanks for once again confirming my prejudices about economists… (sorry! really trying hard to get rid of them, but mostly unsuccessful)

are prejudices part of the phenomenologists’ doctrine ?

And if the people in country R want to hack a minority group to pieces, the thing to do is to use machetes.

What you are suggesting is that we ought to rip off the rich in order to buy the votes of the poor. Dear B: you are in the wrong field. You ought to be a politician.

Just who is it that opposes the reduction of the agricultural subsidies in the United States and Europe that are ripping off taxpayers in those countries and depressing the incomes of farmers in third world countries? (Hint - large corporations).

Which two industries have seen both the most US government subsidies and tax breaks and record profits in the last 6 years? Defense and oil.

It is the f***ing rich who are the most willing and most able to feed off the public trough. It is the whole juvenile ideology that the Habyarimanas of this world spout that keeps anything effective from being done about it.