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Words in the News
 
Friday 07 February 2003
 
Top economists attack Bush's tax plan
 
Dollars Fourteen top economists have signed a statement criticising President Bush's proposed tax cuts - ten of them are Nobel prize winners. The economists say lowering taxes will worsen the government finances and generate more inequality in the US. This report from the BBC's Economics Correspondent Andrew Walker.
 
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There are fourteen signatories to the statement, ten of them Nobel prize winners, including the former World Bank chief economist Joseph Stiglitz who made a name for himself criticising the International Monetary Fund. The most pointed criticism is that the proposed tax cuts won't do what they are meant to do - to provide a boost to the economy which is recovering rather erratically after a recession in 2001.

In particular the economists say that the proposed abolition of taxes on the dividends that companies pay their shareholders is not credible as a short term stimulus. They also say that the tax cuts will worsen the long term budget outlook and add to the nation's chronic budget deficits. That in turn will reduce the country's capacity to invest in schools health and infrastructure. The cuts would also generate further inequalities in post tax income, they say.

Andrew Walker, BBC Economics Correspondent
 
 
Listen Listen to the words
 
made a name for himself
 
became very well known
 
what they are meant to do
 
what is intended
 
boost
 
encouragement
 
erratically
 
if something recovers erratically, progress is not regular
 
abolition
 
ending
 
dividends
 
income paid regularly to investors
 
credible
 
sensible and effective
 
stimulus
 
a stimulus helps something to happen more quickly
 
deficits
 
if a country spends more than it earns, that extra amount is a deficit
 
post tax income
 
the amount you have to spend, after you have paid taxes
 
 
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