The president's proposed 30 percent across-the-board cut in tax rates will be "barely enough" to offset inflation and spur the economy, Treasury Undersecretary Norman Ture said yesterday.
Speaking to a seminar on tax policy, Ture pointed out that the inflation forecast by the administration will be enough to wipe out most of the benefits of a 30 percent cut in tax rates over three years. Under the Reagan plan, if a family of four with a median income had just enough of an increase in earnings to cover inflation, the family's marginal tax rate in 1984 would be only 1 percentage point less than its rate last year. This is because the family would be pushed into higher tax brackets as its income rose.
However, Ture stressed that this marginal rate still would be 9 percentage points lower than if there were no tax cut.
Sen. Robert Dole (R-Kan.), chairman of the Senate Finance Committee, told the seminar later that he believed a multiyear tax cut was likely and that if the president sticks firmly to his particular tax plan, without any changes, then "he may just be able" to get it passed.
Earlier in the day, House Budget Committee Chairman James Jones (D-Okla.) told the same seminar, organized by a public relations firm, Ernest Wittenberg Associates, that the administration's individual tax rate cuts would not pass Congress. He added that House Republicans and conservative Democrats had said the administration would offer a compromise tax bill once the budget outline is adopted later this week.
However, ranking Ways and Means Republican Barber Conable (R-N.Y.) said in a telephone interview that he could not confirm that.