Why Perry’s Chart Was Dishonest, Lazy, or Thoughtless
or “I’m Glad Duels are No Longer Commonplace”
The source Perry cites is a spreadsheet put out by the IRS Statistics of Income (SOI) Division, which provides various statistics broken down into the following categories:
- Top 1 percent
- Top 5 percent
- Top 10 percent
- Top 25 percent
- Top 50 percent
- All (or Top 100 percent)
Perry’s chart depicts two different statistics that are included in the IRS spreadsheet – average tax rate and adjusted gross income (AGI) floor for each group. For all of the groups except the bottom 50%, Perry uses data provided by the IRS. But for the bottom 50% average tax rate, Perry makes a choice: rather than use the11.06% figure provided for all returns (or the top 100%, which would be consistent with his other columns), he chooses to do a little math to come up with the average tax rate paid by the bottom 50%. The result is Perry’s chart:
This chart would be far less dramatic if the left column were 11.06%. But is this a fair way to present the data? Not at all. If you don’t believe it, here’s the same trick going the other way:
Compare this chart with the one above – they show the exact same data. The difference is that for the middle categories, this chart makes them appear smaller by counting all of the returns at the low end, while Perry’s makes them appear larger by including all of the returns at the top end.
It’s quite easy to avoid these kinds of biases in charts. Perry could have derived meaningful splits just as easily as he derived the bottom 50%. That’s what I did in my critique, shown below:
So back to my characterization of Perry’s work here as “dishonest, lazy, or thoughtless.” Why did he derive the single bottom 50% figure and not the others? If he did it intentionally, then it was a dishonest treatment of the statistics. If he didn’t realize that his treatment was unfair, then it was thoughtless (perhaps not exactly the right word – maybe negligent or careless would have been better). If he figured the bottom 50% number and then thought “gosh, that was hard, I don’t want to do any more of that,” then it was lazy.
I couldn’t think of any other options late last night. But I’m open to the possibility than I was being dishonest, lazy, or thoughtless.