Jens 'n' Frens
Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.

"A strong conviction that something must be done is the parent of many bad measures."
  -- Daniel Webster

Thursday, June 02, 2011 :::

There's this story going around that empirical economists have found that marginal tax rates don't have incentive effects, which is odd both in light of common sense and in light of the Romers' research on Keynesian multipliers. Without looking at the details of the new study, I assumed they were either looking at different taxes or, more likely, using a weak test (here's a basic statistical inference lesson: you never really find "no effect" because you can never infer from a sample that a particular population value is exactly zero, or exactly anything else. You may have too little evidence to find an effect - i.e., you may not be able to rule out zero - and if your statistical test has enough power, you can find that the effect, if any, is very small).

But Megan McArdle notes that the source of this new chatter does not really find that rates don't matter, it finds that the US tax code has enough loopholes that statutory tax rate changes don't have large effects on actual tax rates. This interpretation suggests somewhat different public policy implications.

Labels: ,

::: posted by Steven at 10:44 AM

Comments: Post a Comment

Comment Policy

Dollars and Jens
Steven's web-site

Kitchen Cabinet
Colby Cosh
The Volokh Conspiracy
The Corner
The Bleat from James Lileks
Tim Blair
Daily Ablution
Mickey Kaus
Dave Barry
How Appealing
Virginia Postrel
Reason's "Hit and Run"
Captain's Quarters
Roger L. Simon
Power Line
IWF's InkWell
Blogs for Bush
Chetly Zarko
Signifying Nothing
Cosmo Macero
Hub Blog
Ex Parte from Harvard Law's Federalists
Harvard CR blog
Priorities & Frivolities
Daley News
Emil Levitin
Politica Obscura
Wave Maker
Town Watch
Worcester County Repubs

Election '08
Don't Vote
Dave Barry
John McCain

Other Sites of Note
Townhall columnists Cambridge Republican City Committee
Cambridge Chronicle
Robert Winters
Boston Herald
Boston Globe
Boston Metro
Channel 5
Commonwealth Mag
Fox News
Massachusetts Republican Assembly
Robert Benchley Society

U.S. Constitution
9/11 commission report [7 Meg PDF]
Iraq Survey Group report
Fahrenheight 9/11 deceits


Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.

Powered by Blogger