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Bush’s Tax Cuts ‘Too Small’ Says Nobel Economist

by Leroy Baker, Tax-News.com, New York

13 October 2004

Nobel Prize winning economist Edward Prescott has reportedly criticized the scale of the tax cuts passed by President George W. Bush, which he considers “pretty small” and insufficient to buoy the US economy.

"What Bush has done has been not very big, it's pretty small. Tax rates were not cut enough," asserted Mr Prescott, who picked up this year’s Nobel Prize for economics alongside Norwegian Finn Kydland, for research into the nature of business cycles.

Prescott went on to add that a large tax cut in 1986 had managed to reduce tax rates whilst maintaining revenue, and noted that "in the early nineties the economy was depressed by the tax increase in 1993 by about 4%, and it's right at that level now".

Prescott is currently Professor of Economics at Arizona State University and a Senior Monetary Advisor at the Federal Reserve Bank of Minneapolis.

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