THE VOICE OF BUSINESS Our govemrBientf never mef flax if didra'tf hiEie By Richard L. Lesher, President Chamber of Commerce of the United States How, a reporter asked him, would you describe in capsule form what ails the United States? The answer: "When you tax something, you get less of it. When you reward something, you get more of it. In America today, we tax work, thrift, investment, employment, production, incentives and success, while rewarding non-work, unemployment, unem-ployment, welfare spending, consumption, con-sumption, leisure, idleness and mediocrity," Meet Jack Kemp. Formerly a star NFL quarterback, and presently a Congressman from Buffalo, Mr. Kemp has become one of the most articulate leaders of the growing national drive to limit federal spending and slash the rate of taxation. Recently, he and Senator Lloyd Bentsen of Texas, a very knowledgeable chairman of the Joint Economic Committee, were featured speakers at a Washington news conference con-ference on tax reform. The news conference ,was organized by Citizens Choice, a 40,000 member grassroots taxpayers group, with the purpose of calling on Congress to enact specific tax reforms. They include: Lowering tax rates across the board and setting a maximum rate of less than 50 percent; ending the taxation of interest on savings; ending the double taxation of income, whereby government govern-ment taxes income first in the form of corporate profits and later in the form of individual dividends, and encouraging en-couraging business to increase investment in-vestment by making it cheaper to replace outdated plants and equipment. There is a common thread running through each of these proposals and it can be summed up in one word: incentives. in-centives. Senator Bentsen signaled this approach earlier this year when his Joint Economic Committee issued an historic report that rejected Washington's 30-year preoccupation with more government, spending and printing of money. Instead, the report stressed the need for policies to encourage en-courage savings and investment in view of increasing worker productivity and lessening inflation. Senator Bentsen, Congressman Kemp and the members of Citizens Choice share a common conviction. Washington's almost exclusive preference for pumping up the economy with more spending, with more demand for goods and services, has severely impaired the ability of our economy to supply them. So, in Kemp's words: "We need to build a consensus to stimulate supply and production instead of consumption and deficits," Thus, his call for incentives in the form of tax rate reduction to' spur greater production, investment, risk-taking and entrepreneurship. The Administration resists tax reduction with two arguments. First, it blames inflation on working Americans rather than the government's printing presses even though the supply of new dollar bills has been increasing more than twice as fast as the production of goods and services. Never mind. Blaming others permits the Administration Ad-ministration to announce . with a straight face that inflation prevents it from granting us a tax cut. Second, by claiming its policies are basically sound, the administration disclaims the need for new supply-oriented supply-oriented tax policies. This line of reasoning is fine as long as you are willing (as the Administration apparently ap-parently is) to ignore our competitive record against our major trading partners in recent years. As noted in a prior column, we have experienced-the experienced-the lowest rate of savings; the lowest rate of productivity increase; the second lowest rate of investment and a declining rate of growth. ' Ultimately, the greatest victim of this charade has been the American worker. Federal tax receipts have soared from $195 billion in 1970 to $514 billion in fiscal 1980, without Congress ever voting an income tax increase Pure magic? Not at all. Everytime you think you receive a cost of living increase, in-crease, you are actually being forced into a higher tax bracket, and so you will pay a higher percentage of your income in taxes. The progressivity of the tax code ensures that taxes always increase faster than inflation, and inflation ensures that taxes increase automatically. Think you can beat those odds? Chances are you won't, because the bottom line is this: Today, many blue-collar blue-collar workers are closer to the 50 percent tax bracket one formerly reserved for those of wealth. Why work that extra hour or day when government govern-ment taxes half your reward away? We cannot solve this problem with one-shot election-year tax rebates that ignore the real problem of inflation relentlessly pushing more people toward confiscatory rates of taxation. We simply must cut the rate of federal spending and concentrate on producing and investing America back toward new jobs, new technological breakthroughs and new world leadership. Substantial tax rate reductions to restore incentives for individuals coupled with tax changes to generate more funds for business to invest and grow are what we need, and they are what supply-side economics is all about.