Matt Ward said:
Yes that made the news a few months ago. That spreadsheet model was discussing ratio of sovereign debt to GDP and they inadvertently missed a few entire countries in their sum, causing an erroneous lower growth than actual result.
I was talking about tax revenue as a percentage of GDP (not the debt, which I see as a longer term issue). I'll try to find the reference for the Tax vs GDP ratio hopefully tomorrow.
That said these studies are generally "all else equal" and we have a few other significant factors influencing the business climate these last few years.
JR
[follow-up] OK, I found multiple studies demonstrating that increasing tax rates reduces investment and private sector business creation, but I did not find any mention of a magic number. That does not mean that somebody somewhere did not put a number to it, but it probably involves conjecture. Large macro economic studies by their nature are distorted by multiple factors that cannot be simply controlled for, like petri dish experiments.
I find I'm repeating myself if i just paraphrase my old arguments and that bore's even me. 8)
Simply put if government economists could accurately predict the future and control the larger economy they would. So far they have been proved wrong every time they tried.... Maybe this time is different ... nah.
That said we have a pretty good idea of how the economy responds in the margin, but that does not provide a map to micro manage it.
[/ follow up]
Be my guest 8)
