WSJ: Premature Mourning

I admit joining with those who mourned the WSJ in advance of Murdoch's takeover. Fortunately, we can always count on the WSJ editorial board to do something to prove that there isn't really all that much to lose. Many in the blogosphere have been having fun with the following ludicrously misinterpreted graph.


The supposed point is a Laffer curve - showing that revenues decline with increasing tax rate beyond a certain point. The curve drawn is an absurd misfit to the data even with the odd outlier of Norway included. Brad DeLong points out the reason why the Norway outlier looks so odd:


One more point, with respect to "omitting Norway": Personally I see no need to omit Norway. I do see a need to plot the Norway point on the graph correctly. The revenues plotted on the vertical scale include oil excise taxes levied on corporations. The tax rates plotted on the horizontal scale do not--hence the Norway "tax rate" of 28% rather than the correct 52%. Move Norway out to its proper position--with the same tax concept on both axes--and everything is fine.

I will assume for a minute that the people who subscribe to the WSJ and The Economist aren't all total idiots - I been a subscriber myself - so how do they filter all this crap out? I personally just toss the editorial pages...

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