Ph.D. Economist, Class Warfare, and Warren Buffett – Part One of Two
or “Mark Perry’s Dishonest, Lazy, and/or Thoughtless Chart” *
Mark Perry’s at it again over at his Carpe Diem blog, back again with the Warren Buffett thing. But he starts off a column nominally about Warren Buffett with this chart of various effective tax rates:
Here’s what I dislike about this chart: it’s dishonest and/or lazy.
I don’t think it’s thoughtless, as Perry takes the time to derive the bottom 50% number, which isn’t broken out in his source, but leaves the rest of the data as it was presented rather than breaking out the income steps (percentiles 50-75, 75-90, 90-95, 95-99). There are two ways to present this data honestly: either replace the “Bottom 50%” column with an “All” column (which would be 11.06%, but wouldn’t tell the story Perry wants to tell), or else break out all the levels; 0-50, 50-75, 75-90, 90-95, 95-99, and 99-100. Instead, Perry chooses to have all of the income levels over 50% inflated by the top end of the scale.
Class warfare, anyone? Really, is there any other way to describe what he’s done here?
Here’s how the data should have been presented:
Compare this chart with the one above. It shows a few things:
- There is no dramatic step in the tax code; it’s not like the 53rd percentile pays much in taxes.
- The income tax rate at the high end is much higher than it is on the middle class.
- Income taxes aren’t nearly as high on the middle class as many people in the middle class seem to think.
Then Perry continues the Quixotic campaign against Warren Buffett. That’ll have to wait a little while.
Update, October 13: Here’s Part 2.
Mark Perry brought to my attention that my secondary heading to this was inappropriately insulting, so I’ve slightly modified it so that it’s now appropriately insulting.