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A Frenchie travelling the world...

16 October 2008

Tax and economy

Dear readers,

Thanks to Kathy Gill, from US Politics, I ran into this excellent series of charts by Karmanaut. While these charts and the discussion on the blog specifically refer to both current US candidates tax plans (and are therefore doubly irrelevant for this blog), I think they are extremely interesting from an other point of view.

These graphs show that the understanding and perception of any economic policy are extremely difficult for the general public and biased by journalists often poor understanding of both mathematics and economics. Mathematics and particularly statistics are not a trivial thing. They are a tool to describe our reality and ultimately, in this case, to base politics. However, statistics can be presented in very different ways because they weight a specific indicator in function of various factors. If you weight the population factor, you end up with a graph about uneven population distributions, which is politically loaded. If you weight the contribution factor (to taxes or the economy), you also get a politically loaded graph.

This comes from the very weird way our perception works: if we see a phenomenon as affecting one group more than any other, we tend to unconsciously perceive it as being unfair. It takes an effort of the mind to realize that such inequality might very well be a good thing for the whole society (and therefore for all its constituent groups in the end). It might even be fair, ethical, good policy. There is no way to know, unless you understand the background behind the graph itself.

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