Eli Dourado

Debunking Hauser’s law

Here is your assignment for the day.

First, read this article by David Ranson on the WSJ Opinion page.

Second, stare at this chart that I made, which uses state and local receipts in addition to federal receipts (sources: BEA NIPA tables 1.1.5 and 3.1).

Third, ponder whether and in what ways the level of government at which taxes are collected matters.

Fourth, mull over the tautology that government receipts as a percentage of GDP must equal the average tax rate.

Fifth, tell me: what exactly does Hauser’s law tell us about the government’s fiscal situation?