The United States needs a revolutionary change in tax policy if it is to continue to prosper economically, presidential candidate John B. Anderson (R-Ill.) told a Harvard Business School Political Forum crowd yesterday.
Anderson said the "unpalatable truth" in the U.S. is that saving results in a decrease of purchasing power.
The 20-year member of Congress said he advocates taxes on interest and savings to account for inflation. This action would provide incentives to private investors, Anderson added.
"The Kemp-Roth proposal is an old-style approach (across-the-board tax cuts) and does not pinpoint the problem areas of our economy," he told the crowd of more than 175 people.
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"We are being outperformed by our principal overseas competitors," Anderson said. "To regain economic preeminence we have to maintain a higher percentage of business investment as part of the GNP."
The chairman of the House Republican Conference and third-ranking Republican in the House said the Carter administration has not dealt with economic issues consistently, and cited the statements of former cabinet members W. Michael Blumenthal and Juanita H. Kreps to support his point.
"There is no single economic policy in this administration for fighting inflation," he said, adding that Carter has not been able to "chart a course and stick to it."
Conflicting political pressures frustrate attempts to develop a coherent economic policy, Anderson said.
"Government is a contrivance of human wisdom," Anderson said, quoting English philosopher and statesman Edmund Burke. "We must wonder what he (Burke) would say now that human wisdom is in such short supply," he added.