Lies, Damned Lies, and Statistics

Mark Twain is reputed to have said: "There are lies, damned lies, and statistics.” This phenomenon is nicely captured by Darrell Huff in his little book entitled How to Lie with Statistics, but also by Finnish lady Kati Peltola in her commentary on the changes in Finnish taxation. Mrs. Peltola's Op-Ed in Finnish nation-wide newspaper Helsingin Sanomat’s (15.11.2005) is as follows:

“In November 2 Helsingin Sanomat reported how the Finnish rich made money out of their unearned incomes (incomes from capital). The newspaper tried to offer comfort by writing that the taxation of the wealthiest was cut only by the same amount as average wage earner’s. But this is true only in terms of taxation percent. The richest thousand with the biggest taxable income paid taxes 34,1 percent on an average, whereas an average wage earner paid 31,3 percent.
The richest’s tax rate decreased by 0,6 percent units from year 2003, an average wage earner’s tax rate dropped by 0,7 percent units. Even though I would not say that tax cut was concurrent. The richest thousand's average taxable incomes were two million euros. 0,6 percent tax cut makes 12 000 euros. It is not in pace with average tax cut that is 200 euros.
More proper would be to say that tax cut for the richest thousand happened 65 000 times faster than that of average wage earners.” -- My translation without permission.


Post a Comment

<< Home