"Monday Norway Blogging"
Brad DeLong finds a new problem with everyone’s favorite macroeconomic chart — not only has the line been incorrectly drawn through Norway rather than to fit the data points, they haven’t even plotted Norway correctly:
The revenues plotted on the vertical scale include oil excise taxes levied on corporations. The tax rates plotted on the horizontal scale do not–hence the Norway “tax rate” of 28% rather than the correct 52%.
In short, in non-Norway countries, tax revenues rise with tax rates across the range of rates actual countries apply (I think one should concede that, in principle, a tax rate could be so confiscatory as to decrease revenues; the question is whether we are actually anyway in that neighborhood) and this exact same pattern holds in Norway as well.