As they say, there are lies, damn lies, and statistics. The article graphs the maximum tax bracket with the total tax revenue, with no account for the number of people in this bracket or the contribution of all other brackets in the system. Its understandable, since doing the right thing would require a lot of data and would look a bit like calculus (revenue being the area under the product of two curves), and would sadly be too difficult for many readers.
But we don't have that data, so let me hypothesize a situation where this analysis isn't the whole truth. Article states that we take the same revenue whether the rich are taxed at 90% or 30%. Lets say that the left of the graph has 1 person making $1,000,000 in the 90% bracket, and 1000 other people making $50,000 in a 25% bracket. Total tax revenue is $13.4M.
Now at the right of the graph, we have a dip where the top bracket is at 35%, so in the same situation, our revenue should have dropped to $12.8M but was instead stable! Money on trees! Except there is a simple alternative explanation, which is that the bottom tax bracket went from 25% to 26%. Unfortunately, data on this is not supplied by the article.
It should be easy to see that raising taxes will raise tax revenue (not accounting for accounting tricks employed generally by the rich). Plotting a small component against an unqualified whole data set is plain poor research, and the WSJ should be ashamed.
Comments
As they say, there are lies, damn lies, and statistics. The article graphs the maximum tax bracket with the total tax revenue, with no account for the number of people in this bracket or the contribution of all other brackets in the system. Its understandable, since doing the right thing would require a lot of data and would look a bit like calculus (revenue being the area under the product of two curves), and would sadly be too difficult for many readers.
But we don't have that data, so let me hypothesize a situation where this analysis isn't the whole truth. Article states that we take the same revenue whether the rich are taxed at 90% or 30%. Lets say that the left of the graph has 1 person making $1,000,000 in the 90% bracket, and 1000 other people making $50,000 in a 25% bracket. Total tax revenue is $13.4M.
Now at the right of the graph, we have a dip where the top bracket is at 35%, so in the same situation, our revenue should have dropped to $12.8M but was instead stable! Money on trees! Except there is a simple alternative explanation, which is that the bottom tax bracket went from 25% to 26%. Unfortunately, data on this is not supplied by the article.
It should be easy to see that raising taxes will raise tax revenue (not accounting for accounting tricks employed generally by the rich). Plotting a small component against an unqualified whole data set is plain poor research, and the WSJ should be ashamed.