Tuesday, March 6, 2012

Bad economic science

Taxpayers and tax spenders

Correlation error bands are shit. They claim to show that tax progressivity leads to higher deb ratios. They pick a 30 year period between 1979 and 2006. In act, from 1990 to 2000, progressive taxes decreased the budget deficit. The debt bulge actually started with Reagan cutting taxes and increased spending. (Fig 3 in the chart).

As an aside, the most likely cause of our national bankruptcy is the lack of fair voting in the Senate, and the distortion it causes.

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