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About Oregon daily emerald. (Eugene, Or.) 1920-2012 | View Entire Issue (Oct. 23, 1980)
Rep. Jack Kemp, R-New York, attacked the current federal tax structure for being unable to solve stagflation, in a speech on campus Wednesday. Photo by Doug Fick Kemp calls for revised federal tax structure By RICH BRUER Of th« Emerald Congress must overhaul the federal tax structure if it is going to help solve the nation’s stagflation cycle, Rep. Jack Kemp, R-New York, said during a University visit Wednesday. Stumping for Ronald Reagan and Mike Fitzgerald, the Fourth District Repub lican candidate for the U S. House of Representatives, Kemp told audiences at the Business School and the EMU that the Keynesian economic model, which has dominated American thought for the last four decades, is obsolete Kemp, an economic advisor to Reagan, said the Keynesian model has no answer to stagflation — a state of high inflation and high unemployment. He said the model is based on a faulty principle — that demand dictates supply and drives the economy. •'It'S not demand but incentives to produce that drives the economy,” said the former professional quarterback with the San Diego Chargers and the Buffalo Bills. The dilemma of the Keynesian model is that it focuses solely on demand, Kemp said. He prefers to focus on the supply side and the incentives to produce. ' People produce because people buy," he said However, people look at the rate of return on what they produce and make decisions on whether to produce more on that basis, Kemp said. If the incentives — a high rate of return — are not there, production and supply falls, which fuels inflation. Kemp said inflation and a progressive federal tax structure have removed the incentive to produce Inflation has pushed people and businesses into higher tax brackets so rapidly that real net personal income is less today than in 1969, he said. Under the progressive tax structure there is a disincentive to produce because the more you produce the less you keep, Kemp said. “People must produce before they consume,” Kemp said. “People are productive when they are rewarded.” Under the Kemp-Roth bill, coauthored with Sen. Bill Roth, R-Del., and support ed by Reagan, the federal tax rates would be reduced to once again provide rewards for production, he said. Currently, government is suffering revenue shortfalls because production has decreased and must increase taxes to gain back revenues, Kemp said. In creasing taxes only fuels the cycle by removing incentives to produce, he ad ded. Kemp said that tax revenue does not equal the tax rate, but rather the tax rate multiplied by the tax base. Tax revenues are increased by enlarging the tax base, not by increasing the tax rates Keeping tax rates low fuels production and thereby enlarges the tax base, Kemp explained By lowering taxes and build ing the economy the government will increase its tax revenues without infla tion and unemployment, he said. Also, he said that doing so would allow the government to budget for both a stronger defense and needed social services. Kemp said that his proposed bill would be phased in over three years "so as not to traumatize the economy.” Kemp criticized Pres. Carter and John Anderson for advocating "austerity” as a means of fighting inflation. "We need to grow and produce our way out of it." Rent hike jolts Ashlane residents Photo by Doug Pick Ashlane rent may jump. By VICKI NESBITT Ol the Emerald For seven years, rent payments at the Ashlane Apartments in Springfield have remained the same Until recently — when residents of the government-subsidized student hous ing project were hit with a 40-percent rent increase. "The idea is low-cost housing, but a 40-percent increase at once — students just can’t manage that,” says Steve Rubin, who is spearheading the oppo sition to the increase. Together with Mark Meehl, a Lane Community College student, Rubin has formed a tenant rent-opposition com mittee, generated support from local politicians and delayed a final decision on the increase until Nov. 3. Ashlane houses 230 University and LCC students and a few faculty members. Although the 160-unit build ing is managed by Adult Student Hous ing, the federal housing and urban development department holds the 3-percent mortgage and must approve any rent increases. An unfurnished, one-bedroom apart ment rents for $102, a two-bedroom for $124 and three bedrooms for $139. The rates have remained unchanged since 1973. The proposal increase rates to $143 for a one-bedroom, $173 for two and $195 for three. Robert Baker, ASH vice-president of operations, says the increase is neces sary to replace short-lived items that generally last 10 years. The re placement reserve fund had been de pleted during the years of unchanged rates, Baker says. With the increase, Ashlane's rent would match that of other subsidized apartments in the area, he adds. Rubin agrees that a rent increase is in order, but the large proposed increase is due to ASH corporate mismanagement, he claims. In 1975, two ASH officials were charged with and eventually convicted of corporate embezzlement. Because the case was tied up in litigation for several years, a rent increase could not be considered, says HUD representa tive Ken O’Halloran. The increase-opposition committee has submitted to HUD a 70-page book let explaining its position, including an economic analysis of the tenants and evaluations of ASH’s profit-loss sta tements. Rubin says the committee already has been successful. HUD delayed the final decision for one month, and that alone has saved tenants $7,000 cumulatively Rep. Nancie Fadeley, D-Eugene, Rep. Jim Weaver, D-Ore., the ASUO, the Oregon Student Public Research Interest Group, the Associated Students of LCC and the Inter-Campus Ministry all have offered suppport to the committee. Chuck Spinner of the University's Legal Services Office is offering legal assistance. Spinner is working on an administrative appeal and court in junction in the event HUD approves a rent increase of more than 15 percent.
