A substantial proportion of the tax-revision program President Carter plans to unveil this month will not be scheduled to take full effect until 1980 or later, sources close to the package disclosed yesterday.
Carter is expected to ask that as many as half the tax changes contained in the coming proposal be either delayed beyond the 1979 tax year or "phased in" over a period of several years.
Sources said the phase-in strategy is based on two key considerations:
A desire to soften the psychological impact of some of the tax-change proposals to avoid shaking up business and consumers. Some planners reportedly are fearful of damaging confidence at a time when the economic outlook is somewhat shaky.
A delay would give the administration more flexibility in staggering the individual proposals to minimize the impact on the budget. The Carter package is said to involve massive gains and losses in revenues, and unless some provisions are phased in gradually, the program could bloat the deficit substantially.
The President is expected to begin making final decisions today and Friday on a series of options presented to him by Treasury tax-drafters. Sources said Carter still has not decided for certain on any provision.
The White House agreed Tuesday to a request by Senate leaders that it postpone unveiling of the package until the Senate completes action on the carter energy program. Sources said although no formal target date has been scheduled, release now is expected to come in mid-October.
The rationale behind the delay is to avert a round of tadeoffs between the energy measure and the tax-revision package, both of which involve sizable changes in the tax treatment of corporations and individuals.
However, the postponement is making some liberals uneasy that too long a delay may ruin prospects for passage of the tax-revisions program.
Rep. Al Ullman (D-Ore.), chairman of the House Ways and Means Committee, reprotedly has warned that unless hearings are held this year before Congress adjourns there will be only scant chance of pushing the tax bill through both houses by the end of 1978.
The Senate technically is schedueld to adjourn on October 15 and the House on October 20, but few observers expect them to adhere to that deadline. The Senate appears likely to be tied up on the energy bill for some time.
Among the major tax changes likely to be phased in gradually is the elimination the President is expected to propose of the special tax treatment for capital gains. Sources say that provision may not be designed to become fully effective for three or four years.
Another is the propsoed elimination of the present tax subsidy for Domestic International Sales Corporations. Although administration officials have asserted publicly the tax break is unjustifiable, planners believe it could upset business to retract it abruptly.