The Carter administration plans to introduce its comprehensive tax legislation to Congress by late summer, with the probable emphasis on reform of the present system rather than on a radical overhaul, Treasury Secretary W. Michael Blumenthal said yesterday.
"We have a tax system that works - imperfectly to be sure, but at that better than most," Blumenthal told the Financial Analysts Federation meeting here. "It is preferable to correct its faults and build upon our knowledge and experience with it than to embark on fundamental change with an untried system whose effects we could not fully foresee."
The Treasury Sevretary reiter ed previous statements that the proposals will focus on simplifying the system and increasing its perceived fairness as well as on enhancing incentives for business to expand.
He said the reform proposal should "make it possible for more than three out of four Americans to use the standard deduction and determine their tax from a simple table."
But Blumenthal said the administration's mind still remains "open to a very wide variety of options" for achieving any of these goals.
To stimulate business investment, for example, the administration is still weighing whether to eliminate the double taxation of dividends, a proposal that has been frequently floated in the past effect an overall cut in the corporate tax rate, allow larger deductions for depreciation or boost the investment tax credit.
But stating "that people with the same income should pay the same amount of tax." Blumenthal seemed to hint that elimination of preferential treatment of capital gains over earned income would almost certainly be part of the administration's final plan, as well as elimination of many of these special deductions that now run through the tax code.
"The inability to understand what the tax laws are, and the belief that there is money to be made through tax planning and gamesmanship, undermine the confidence and trust that we require for a system based primarily on voluntary compliance," he told the audience of securities analysts.
Budget director Bert Lance, in a separate appearance, sought to dispel concern within the financial community that the federal budget deficit for fiscal 1978 could be as large as $65 billion.
Lance said that the $65 billion figure he mentioned Tuesday was "the upper limit of the range" of the deficit for the upcoming fiscal year, and there "may well be some circumstances that could loweer that number significantly."
The circumstances, he said, include the possibility that the current $10 billion annual shortfall in federal spending below what was budgeted could continue for another year and that a better-than-expected busines environment could increase federal tax receipts.
Meanwhile, he expressed confidence that President Carter will meet his goal of a balanced budget for fiscal 1981.
"I've seen nothing to indicate we can't do that," he said.
John H. Shenefield, the acting assistant attorney general for the antitrust division, in an appearance before the same group, said the Justice Department would not be deterred in bringing anti-trust cases just because the targets are giant companies that put a strain on the division's resources.
"We cannot shrug our governmental shoulders and say that some cases are too big to touch," he said, " and we will not."
Noting that the current Justice Department case against IBM, which has been in progress since 1969, and the proceeding against AT&T, which is still in the pretrial stage, represent a strain on the antitrust division. Shenefield said the division was considering a number of ways "to make these cases more manageable."