THE SUBSTITUTION EFFECT OF TAX RATE CHANGES.  The wrangle over the federal debt ceiling (a useful bit of policy fiction, recognizing as it does that there are limits to a central government's ability to borrow, Last Best Hope of Mankind notwithstanding) that has turned into a wrangle over future commitments of the United States government (something that will have to be seen through, whether the current divided government seeks to do so or not) has brought out the usual suspects nostalgic for the tax codes of the Eisenhower era, in which the rich paid their fair share, or something.

Reason's Nick Gillespie has an instructive contribution to that wrangle, The Remarkably Stable Amount [c.q.] of Federal Revenue.

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Mr Gillespie's policy conclusion: "Any budget plan based on revenue being better than 19 percent of GDP is just blowing smoke." He elaborates here.

Total revenues to governments of all levels are a greater share of national output in other industrial countries, which suggests two research puzzles.  First, within a country, what substitutions take place to produce stable revenue shares even as marginal tax rates change?  Second, what factors lead to different revenue shares in different countries?