WHY DOESN’T THE ECONOMIST UNDERSTAND ELEMENTARY ECONOMICS?
Those who have not studied economics often rely on the press, who are often equally ignorant of economics and, hence, are unable to differentiate between sense and nonsense. While The Wall Street Journal (and particularly the editorial page) normally gets it right, The New York Times and many other newspapers too often let political bias get in the way of the facts.
It is particularly disappointing when a former great newsmagazine, The Economist, allows very sloppy reporting and analysis on serious economic topics. This week, The Economist published an article, “Indecent Disclosure” (1/02) describing tax reform proposals of the Republican candidates as “exorbitant,” putting forth “hugely expensive” plans before “accounting for economic effects.”
The whole point of tax reform is to reduce the economic drag of the current US tax code -- which The Economist correctly describes as “a mess.”
But the article implies that higher tax rates will always bring in more revenue (which they appear to view as desirable) and lower tax rates will bring in less revenue. For very low rates that is true, but for high rates, it is false.



