Oregon daily emerald. (Eugene, Or.) 1920-2012, October 23, 1980, Section A, Image 1

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    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last four decades, is obsolete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.