Yaa Boo Lefties, the Laffer Curve exists!
Pharyngula: The stuff of legend
This is turning up all over the place — at Brad DeLong's, Crooked Timber, and this pair is from Cosmic Variance — it's the most sublimely, awesomely, wickedly stupid example of fudging a curve ever. The two graphs below have exactly the same data points, and the only difference is the curve that was 'fit' to the distribution. Which one looks plausible to you?
The one on the left looks sensible and simple, and looks like it was actually drawn with some consideration of the data. The one on the right … not so much. I have no idea how anyone could think that particular curve belongs in there.
Yeh, yeh, yeh ... the lefties are all excited because the WSJ drew a silly illustrative line on a graph to indicate the principle of the Laffer curve. But is their straight line a better fit?
If it was true then it would show that the higher the tax rate the higher the take, presumably up to and beyond 100% (and yes there have been over 100% tax rates). And that is crap.
Purely by eye I sliced the chart on bands of rates and estimated the mean point. If anyone wants to do it more accurately I would be pleased to see it. (Norway is a special case in that they are hoovering up North Sea Tax revenue, but even without it the curve is similar.)