So, maybe I'm oversimplifying things, but this graph seems ridiculous to me.Last week (7/13/2007) a WSJ editorial used this Laffer-curve diagram to support the claim that the US needs to decrease its corporate tax rates in order to increase its revenues. I don't want to argue the merits of this view. I merely want to point out that the data on this graph would be better with a straight-line correlation--with Norway, and possibly Luxemborg, being outliers. In which case, the point would be that the higher the taxes the greater the revenue.
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