You're not going to get any sense out of the American Enterprise Institute. They get paid to do this kind of thing.

As an aside - interesting data point for the UAE. How do they run a government without collecting taxes?

Of course I'm not going to get any sense out of AEI. They're paid liars. I knew that from the outset. For that matter, I have - shall we say - an institutional mistrust of editorial pages in general and the WSJ editorial page in particular. But my objective here was and is not to document the many silly things that AEI or WSJ do. It is to illustrate how to spot cooked-up numbers, and that requires that I extend the assumption of innocence to whomever I'm fisking that day.

Regarding the U.A.E., there are three points to keep in mind: First, the U.A.E. is a (con)federation, and it is quite possible that their corporate taxes are applied at the national level. Secondly it's a minor country and minor country economies do funny things sometimes, because they can finance their entire economy off - say - oil extraction or banking services.

Third, the diagram doesn't show total tax revenue, it shows revenue from corporate taxes as a percentage of GDP (always pay attention to what's on the axes of a plot - that's probably the lesson for next time :-P). No, I don't think that makes sense in the context of a Laffer curve, but the entire purpose of this series is to offer tools that allow the reader to debunk number nonsense without necessarily knowing what the numbers represent. Lambasting the curve for not being a Laffer curve, while appropriate in the context of an ordinary fisking, would be beside the point in the context of this series.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.