The Carter administration announced yesterday it does not intend to support a congressional proposal to provide faster depreciation writeoffs for business, primarily because of budgetary considerations.
In hearings before a Senate Finance subcommittee, Treasury Secretary G. William Miller estimated the proposal would cost the government $3.8 billion in lost revenues in 1980 and $86.2 billion in 1988.
He said enactment of the plan "would be premature at this time."
If was not immediately clear what impact, if any, the administration's opposition would have on the measure's prospects. Although Miller criticized the proposal's cost, he generally praised the notion of faster depreciation writeoffs.
Miller's opposition was all but drowned out by a spate of business witnesses who testified in favor of the measure as a way to stimulate capital formation and spur more business investment.
The major outside criticism of the bill came from the Tax Reform Research Group, an affiliate of consumer advocate Ralph Nader, which warned the measure would effectively reduce taxes on corporations by as much as 50 percent within a few years.
The measure, known informally as the "10-5-3" proposal, would scrap the existing depreciation system for capital expenditures and allow writeoff of commercial buildings in 10 years, equipment costs in 5 and vehicles in 3.
Large corporations and business groups generally have rallied behind the plan, but smaller businesses and liberals mostly have opposed it. The proposal have 252 co-sponsors in the House.
There is substantial disagreement over the likely cost of the measure, over the long run. Although Treasury and congressional staffers estimate its cost at $50 billion or so after a few years, proponents say it would be $35 billion or less.
The difference centers mainly on assumptions about "feedback" -- that is, how much new tax revenues the proposal would generate by stimulating investment and spurring the economy.