Feldstein Expresses Pessimism About Future of Proposition 13

Expressing a "pessimistic view" about the success of Proposition 13, Martin S. Feldstein '61, professor of Economics, said Saturday the tax cut will force people to give up $1 in services to save 40 or 50 cents in taxes.

Feldstein spoke to a group of about 50 major contributors to the Harvard College Fund as part of the eighth annual President's Associates Weekend.

"It is unfortunate that the focus (of the tax revolt) was on the property tax. Bureaucrats will do their best to make it as unpleasant as possible for people," he said.

Outlining three reasons for the tax revolt, Feldstein said the principal force behind it is "a legislative response to a widespread public feeling of being overtaxed, especially in the middle and lower income groups."

Bringing up the tax cut proposal sponsored by Sen. William J. Roth (R-Del.) and Rep. Jack F. Kemp (R-N.Y.), Feldstine argued that "in a society like ours where inflation is inherent," a tax cut should be, in some way, linked to the inflation rate.

He said that under the plan, which calls for a 33 per cent cut in the tax rates spread over four years, the 8 per cent yearly reduction could be impossible if the inflation rate jumped past its current 7 per cent annual level.

A Word of Caution

Feldstein also said he generally dislikes mandatory wage and price controls, which he thinks the government may possibly reinstate in the near future. "We're in for unfortunate times," he said.

The discussion marked the close of the weekend's formal activities for the group of about 185 people who form the President's Associates.

Peter F. Clifton'49, executive director of the Fund said members of the group each contribute at least $5000 annually, $10,000 during their reunion years to Harvard.

The annual gathering during Dartmouth weekend begins Friday night with dinner and address from the president at 17 Quincy Street and ends Saturday afternoon with lunch, cocktails, and the football game.

In his speech at this year's dinner, President Bok followed last year's critique of the medical profession with a discussion of the problems of excess litigation in American society and the overbundance of lawyers.