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Show THE VOICE OF BUSINESS Why can'tf government free enterprise? By Richard L. Lewher, Prenident Cliumber of Commerce of the United Slates Just recently, nine local neighborhood organizations from around the country came to Washington to explain how their self-help work projects pro-jects were countering youth crime in big-city ghettos. The remarkably revealing two-day event was sponsored by the American Enterprise Institute; but with the exception of one account by columnist William Raspberry, it was largely ignored by the national media. That's a shame, frankly, because the media, and through them the country, might have learned something. These organizations, after all, are run by people who must cope daily with wretched ghetto conditions. They know what they're talking about. What's more, their message gave short shrift to Washington's traditional belief that inner city tensions can best be cooled by a new outpouring of federal aid. For example, before the government even knew of its existence, one local organization, the House of Umoja, had already made great strides in eliminating the shootings and stabbings that once plagued Philadelphia. Impressed Im-pressed with such an obvious success story, Washington stepped in and offered of-fered "to help." Here's what happened then in the words of House of Umoja leader, Sister Falaka Fattah: . "Because we have a residential program, pro-gram, which is a group home, now we have to deal with a license every year. Before we were 'discovered,' we were doing the same job without a license. In order to have a license, you have to pass the different regulations you know, the kitchen has to be just so; you have to have credentials in terms of staff, you have to have a social worker. They tell you your house has to be fixed up, but they don't give you any money to fix it up. It's a bureaucratic nightmare." And on, and on. ..and on. One participant partici-pant noted that in order to qualify for many of their job programs "...you've got to be a criminal. ..you can't be just a poor kid who needs service." Doesn't the government understand that the incentive in-centive is to prevent crime, not create it? One man who does understand incentives, incen-tives, and their vital role in fighting crime by creating jobs, opportunity and hope, is Congressman Jack Kemp of New York. Kemp, you might remember, is that engaging fellow who has won a wide audience around the country while ruffling quite a few feathers in Washington because of his penchant for spouting such heresies as: "People don't work to pay taxes, but to earn more after-tax income. So, by lowering tax rates, we can increase work, savings, investment, growth and prosperity." As Kemp notes, if a person receiving the equivalent of $8,000 a year in welfare benefits today were offered a $10,000 a year job, that person would face an astounding tax rate of 80 percent. per-cent. Where is the incentive for individuals in-dividuals to get off welfare if the government insists on taxing their new work effort at higher rates than it imposes im-poses on millionaires? And why give grants and loans to businesses that must be financed by higher taxes on the very enterprises most likely to offer new opportunities to the disadvantaged? disadvan-taged? So Kemp proposes we stop feigning compassion while perpetuating dependency, and start treating the poor as individuals of real worth and poten- ;er tial entrepreneurial skills. The way to' do that, he argues, is to get the wheels1" of innovation rolling again by re-35 establishing incentives at the local"'1' level. Along with Congressman Robert Tl Garcia of New York City, he offers a:e novel approach The Urban Jobs ancK3 Enterprise Zone Act. Poverty areas meeting specified criteria could be designated Enterprise Zones, within3'1 which individuals and enterprises could5' engage in economic activity atM dramatically reduced rates of taxation. The beauty of this approach is thatml the government will not lose revenues by reducing tax rates on young blacks and Hispanics who currently produce Ji no taxable income. Of course we must -do more than just increase tax incen- tives. We must also reduce the condi- tions of excessive regulation that are hampering neighborhood organizations like the House of Umoja, and go after other disincentives as well. In'36 Washington, D.C., the highest workers'0' compensation in the country, which is1! mandated by law, payment of the100 minimum wage, and rent controls, -P have all combined to impoverish large area of the city and drive thousands of jobs into the surrounding suburbs. These problems are serious: h and they must be faced. & Still, Congressman Kemp has taken a w big step in the right direction. He has of-' fered a bill that deals with human 5' nature and economic reality the way 3f they are, rather than the wayl1 Washington wants them to be. And, bym offering hope, rather than merely a3?! handout, to those who have no hope, he is articulating the true meaning of com- ' passion and of help. Just think how m many more people government could n help, if only it had the courage to free2' enterprise. |