The chairman of the Senate Finance Committee said yesterday he plans to push for a significantly larger tax cut bill than $16 billion measure the House passed on Thursday, with bigger reductions in capital gains taxes despite President Carter's opposition.
While declining to say specifically how large a tax cut he favors, Sen. Russell B. Long (D-La.) said he hopes to enlarge the tax cuts for individuals enough to offset the new Social Security tax hikes this year and next - a move that could boost the total past $20 billion.
Long also indicated he may consider scrapping the new tax break the House passed for homesellers, as part of an effort to make more room for a larger cut in overall capital gains taxes. A capital gain is the profit from the sale of stocks or other assets.
And he said he plans to revamp the House provisions repealing most of the "minimum tax" to retain some sort of formula for preventing high-income investors with large amounts of "paper losses" from tax shelters from escaping payment of taxes.
Long made his remarks in an interview after conferring with Treasury Secretary W. Michael Blumenthal, who is managing the tax bill for the administration. The two met at the Capital in late afternoon to mull over strategy.
Although Long declined to discuss their conversation, Blumenthal told a White House briefing that "based on my discussion with various senators, including the chairman of the Finance Committee, we feel there are a number of areas where improvements can be made."
Blumenthal and Jody Powell, Carter's press secretary, also sidestepped questions on whether the president would carry out an earlier threat to veto the bill. The Secretary said Carter would wait until the Senate acted before deciding.
In discussing his plans yesterday, Long said the amount by which his panel enlarges the House-passed bill will depend on how much "room" it can garner within the limits of the new fiscal 1979 congressional budget ceiling - a big uncertainty, in his view.
While the budget limit allows for a $19.4 billion taxcut measure, Long indicated he intends to seek more flexiblty by cutting back on some House-passed measures to enlarge other provisions and by postponing the effective dates of some measures.
He also said he hopes to persuade the Senate to revamp its system for estimating th cost of tax reductions, by taking account of increases in tax revenues that would be generated if the tax cuts spurred the economy. That kind of accounting would reduce the size of the so-called revenue loss.
Long made these points in discussing the outlook for the tax bill:
Although it almost certainly will enlarge the tax cuts for individuals, the Finance Committee won't tamper with the impact of the House measure, which spreads the tax reductions proportionately, primarily in the $15,000 to $100,000 brackets.
Long favors the House-passed provision that allows a new "inflation adjustment" for capital gains taxes. But the Senate measure won't extend such "indexing" to ordinary income-tax rates, and won't provide any rollback in the scheduled increases in Social Security taxes. There also won't be much more in the line of "tax reform."
He reiterated his support of a proposal by the late President Kennedy that would reduce the maximum tax rate on capital gains to 25 percent, from the 35 percent in the House bill and the 49.1 percent now paid by a handful of wealthy investors. The measure would tax only 30 per cent of a capital gain rather than the half taxed now.
Long said he hasn't made up his mind yet on what to do about cutting taxes for business.