I was inspired by the diary entry from
kamosa titled, "
Forbes Ranks Clinton best for economy" to do some research and some actual number crunching about this. I'm no statistician, so I thought I'd post my findings here for someone to review and add to. I did post a version in the original thread. It has references to other (more involved) numbers related studies on the subject.
I took values from the bottom two links and graphed them in Excel and this is what I came up with.
I studied the years 1960 to 1997. I placed the following variables against eachother:
x = Income tax percentage on the wages of those
earning more than $1,000,000 in one year
y = Percentage change in value of GDP from previous year
If the years are aligned, for example the percentage change in GDP in 1970 is aligned with the tax rate on the wealthy in 1970, there is little correlation:
The Correlation is .18
The Covariance is 4.4
But the graph is very telling when it is overlayed. It is obvious to the naked eye that there is a phase shift.
When the variables are shifted 3 years, so that the GDP in 1973 corresponds to the tax rate for the wealthy in 1970, the following occurs:
The Correlation is .34
The Covariance is 8.25
So as the years shift to allow for effect, there is an increase in the positive correlation, or an increase in x leads to an increase in y.
The graph is interesting but I have no way of posting it.
source: tax rates
Source GDP percentage change