Nobel prize-winning economist Milton Friedman yesterday joined with the American Conservative Union to urge passage of laws that would limit the percentage of income the government can take in taxes.

Friedman said the National Tax Limitation Committee, which he described as a nonpartisan, single-issue group, is working in about a dozen states to put tax limitation proposals on the ballot or to pressure state legislatures into passing them as a consitutional amendment.

Speaking at a news conference, Friedman said the committee will concentrate its lobbying efforts in Michigan, Massachusetts and Illinois. Rep. Philip M. Crane (R-Ill.), president of the ACU, said has group has budgeted about $100,000 for the project.

"The real concept is the limitation of governmental spending," Fridman said. "Nothing else has more prospect of stopping the control that government has over peoples' lives."

Friedman said the proposal would differ from state to state, but essentially would put a percentage ceiling on the income tax a state could levy. In earlier efforts, the percentage has ranged from 14 per cent in Massachusetts to 6.6 per cent in Illinois. According to a background Paper released yesterday, the average is about 8 per cent.

Michigan voters defeated a tax limitation measure last year as did Arizona voters in 1974 after it passed both houses of the state legislature there.

The first attempt to pass such a measure began in California in 1973 with a ballot initiative known as Proposition One. Then California Gov-Ronald Reagan campaigned extensively for it, but the voters soundly rejected it 54 per cent to 46 per cent. Many observers at the time thought Reagan was pushing the concept in the belief that, if successful, it would give him a major issue for his 1976 try for the Presidency.

"The big mistake in California," Friedman said yesterday, "was that we tried to make it foolproof, but we made it so complicated that it was difficult for ordinary people to understand." He said he has since learned his lesson. He added that tax limitation is not the kind of issue on which a candidate "can sweep to power."

In justifying the measure, Friedman said that until 1923, governmental spending never exceeded 10 per cent. Since then, it has risen to 40 per cent, two-thirds of which is federal, compared to 28 per cent in Japan, 30 to 33 per cent in Australia, 40 to 50 per cent in Germany and France and 50 to 60 per cent in England.

Friedman said each part of a budget is voted on democratically, but the individual never has a chance to vote on the entire budget. This proposal would give the voter a way to tell the government he or she wants a limit of 25 per cent or whatever, forcing the government to decide not how much to spend, but where to spend what it has.

"Parkinson was right," Friedman said, paraphrasing a well-known maxim of bureaucracy. "Spending rises to meet the amount of money available to spend." He said New Hampshire does not have a state income tax, unlike neighboring Vermont or Massachusetts.But he said he sees no appreciable difference among them in government services.

Crane said conservatives have discussed the possibility of a national constitutional amendment, "but until you get 12 or 15 states that already have it, it's unrealistic to think it would pass."

The ACU has established its own task force to push for tax limitations, Crane said. It is headed by Gov. James Edwards of South Carolina and includes himself, former Treasury Secretary William Simon and former U.S. Commissioner of Welfare Robert B. Carleson.

"We need no more graphic example of Mr. Carter's philosophy," Crane said, "than his statement in New Jersey this weekend. There he tried to convince that state's citizens that their new and despised income tax was good for them and that their opposition to it was somehow not in their own interests.

We believe that the American people know what is best for them and that they share our belief that it is time to shout 'enough' to more taxes for a bigger government."