Big business asked Congress yesterday to pass a $25 billion tax cut, as President Carter has proposed, but urged the lawmakers to make the reductions effective in July rather than October and to scrap the administration's "tax reform" program.
In testimony before the House Ways and Means Committee, Reginald H. Jones, spokesman for the Business Roundtable, a group of 185 business and financial firms, said the tax cut was needed promptly to avert a slowdown or possible recession.
However, Jones told the panel he could report "no support whatsoever" among businessmen "for the administration's tax reform proposals." He said if scrapping the "reforms" would bloat the deficit too much, then Congress should postpone ending the telephone excise tax.
Jones' position was endorsed in principle by several other business leaders testifying yesterday, including Roland M. Bixler, spokesman for the National Association of Manufacturers, and David M. Roderick, president of the United States Steel Corp.
Meanwhile, Rep. Al Ullman (D-Ore.) suggested during the hearing that the panel may begin to take a closer look at charges that some U.S. businesses pay no tax on their income from domestic operations, as implied recently by Rep. Charles A. Vanik (D-Ohio).
Ullman made the remark after noting that some domestic industries which presumably pay no federal income taxes have been critical of his proposal to reduce the present "double taxation" of corporate profits and stockholders dividends.
It was not immediately clear how far Ullman planned to press his case. However, the chairman said he was "concerned that some of the criticism comes from corporations that don't pay taxes." Ullman said some firms use accounting tricks to apply foreign tax credits to domestic earnings.
The business leaders' testimony was countered by that of spokesmen for two major "tax reform" organizations, Ralph Nader's Public Citizens Tax Reform Research Group, and Tax Analysts and Advocates. Both said they supported Carter's "tax reform" package.
Robert M. Brandon, director of the Nader group, told the committee his organization "strongly opposes" the business tax cuts Carter has proposed. He called instead for a reduction in the budget deficit to help corporations meet their financing needs.
Thomas J. Reese, legislative director of Tax Analysts and Advocates, urged the committee to go further than the Carter package proposed and consider tightening the tax on capital gains at death. Reese questioned business' "free-market commitment" in seeking tax subsidies.
The opposition by the businessmen included criticism of Carter's three major "tax reform" proposals - measures to eliminate present foreign tax breaks for business and to limit existing deductions for the so-called "three-martini" lunch.
Charles W. Stewart, spokesman for the Machinery and Allied Products Institute, also was sharply critical of the administration's tax "reform" proposals. Stewart told the panel that "some of them are petty, counterproductive and sometimes silly."
Yesterday's testimony marked the beginning of a month of hearings the panel has scheduled to hear public witnesses before it drafts the tax legislation. The administration presented the package formally in a three-day session in January.
The committee voted last week generally to go along with Carter's recommendation that the tax package not exceed $25 billion. However, the size of the package and its makeup still are in doubt. Some members want to cut Social Security taxes instead.