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Nobel laureate calls for steeper tax cuts in US

Yahoo! News - Nobel laureate calls for steeper tax cuts in US. The Nobel Prize for Economics is still very much worth something (unlike the Nobel Peace Prize), and this Nobel laureate says that the Bush tax cuts weren't big enough:

"What Bush has done has been not very big, it's pretty small," Prescott told CNBC financial news television.

"Tax rates were not cut enough," he said. [Note: Bush wanted them bigger and didn't get what he wanted]

Lower tax rates provided an incentive to work, Prescott said.

Prescott and Norwegian Finn Kydland won the 2004 Nobel Economics Prize for research into the forces behind business cycles.

The American analyst, who is a professor at Arizona State University and a researcher at the Federal Reserve Bank of Minneapolis, said a large tax cut in 1986 had lowered rates while collecting the same revenue.

But "in the early '90s the economy was depressed by the tax increase in '93 by about four percent, and it's right at that level now," Prescott said.

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