Sunday, July 16, 2006

Do supply side economists need a refresher course in arithmetic?

I was just reading a piece by supply side economist Alan Reynolds from a month ago. It contained some rather entertaining quantitative reasoning:

"If so, cutting someone's marginal tax from 40 percent to 30 percent would typically result in about 16 percent more income being reported. With 16 percent more income and a 10 percent lower tax rates, revenues would certainly not go down."

I think it's safe to let that one speak for itself.

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