Speaking of supply-side economics, I came across this revealing graph on in a July 2007 post on Mark Thoma's blog. How badly does the Wall Street Journal editorial board want to find real world evidence of the Laffer curve? Badly enough that they are willing to stoop to the level of dishonesty exhibited in this graph.
As anyone who has ever run a regression analysis can tell right away, the WSJ's editors' line is obviously not a line of best fit; they simply have drawn a line through an outlier (Norway). This was no mere accident; the WSJ editors clearly made a conscious decision to fudge with the graph in order to re-create the Laffer curve.
Thoma offers an alternative line, which clearly fits the data plot much better. The evidence points to a linear relationship between corporate tax rates and tax revenues.
