The Mankiw Distortion Field: This Time, Corporate Taxes

I think we can assume that Greg Mankiw knows the difference between tax rates and effective tax rates–after all the deductions, exemptions, etc.

And he surely knows that effective tax rates are what actually matter when it comes to impact, income, and incentives.

But still, he posts this graph as if it was actually representative of something meaningful.

Greg is certainly familiar with the CBO analysis that Paul Krugman posted about only three days ago. (And many others like it.) I have to assume he’s seen the tables in it like the one Krugman posted–or this one for instance:


He must know that the graph he posts is a fundamental misrepresentation of reality. So I can only assume that his intention is to fool those who don’t know all the things that he knows all too well.

I’ve pointed out before how Mankiw simply abandons the data even (especially?) after he’s just explained quite cogently that the data contradicts his beliefs. Presumably because he just doesn’t want to let go of those beliefs.

Update: Mark Thoma, Linda Beale, and Dean Baker all make the same point.

Update II: And Brad DeLong, linking to all of the above.






3 responses to “The Mankiw Distortion Field: This Time, Corporate Taxes”

  1. Sune Avatar

    I agree. And one should in general be wary of graphs showing/comparing tax rates. I think Mankiw needs to allow comments on his blog, so we can get a fair chance to object to his postings.

  2. Steve Roth Avatar

    Oh, I’ll give him his due: his trackbacks actually *work.* (Why is it that these don’t seem to work on 99% of blogs?) So if you want to comment, get your own blog and link to his; he’ll link back, automatically.
    If I was him, very well-known and with what is presumably a high-traffic blog, I’d probably use the same method. It’s arguably a more elegant internet-based solution than a comment thread.
    He has no responsibility to provide a discussion forum on his blog, or to do all the management/moderation work that’s required for same.

  3. Barry Avatar

    Steve, that’s true; however, I find it not coincidental that he abandoned comments when it became clear that the score was Mankiw 0, the collective knowledge of the internet 100.
    The man just isn’t honest. He may know far more economics than 99.99% of the human race, but he’s chosen to work the BS side.