Is the WSJ Misusing the Laffer Curve with Simplistic Data Analysis?

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The discussion critiques a Wall Street Journal article that features a graph related to the Laffer Curve, which suggests that tax revenues drop to zero at a corporate tax rate of about 33% and become negative beyond that point. Participants express skepticism about the statistical methods used to create the graph, implying a lack of rigor in the analysis. The commentary highlights a perceived misunderstanding of basic statistical concepts, such as outliers, and humorously questions the credibility of the graph's presentation. The overall sentiment reflects a critical view of the interpretation of supply-side economics as presented in the article.
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Take a look at http://online.wsj.com/article_email/SB118428874152665452-lMyQjAxMDE3ODE0MzIxODM4Wj.html" on the WSJ, and especially the graph.

Somebody has slept through a linear regression class :smile: :smile:

(via http://cosmicvariance.com/2007/07/13/the-best-curve-fitting-ever/" and )
Among other features, we note with amusement that the plotted curve implies that tax revenues hit zero at a corporate tax rate of about 33%, and become dramatically negative thereafter. As of this writing, it is unclear what advanced statistical software package was used to fit the Laffer Curve to the data; the smart money seems to be on MS Paint.
 
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That is pretty sad. Even though I may not agree with certain sentiments they say about supply side economics, they have an excellent point about this idiocy. Do you think these people know what an outlier is?

Is there a coincidence that the curve is called the "Laffer" curve? I'm laughing.
 

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